Most people need to work to meet their living expenses whether they are parents or not. While in times past, one parent brought home the bacon and the other cared for the kids, these days, it's more typical for both parents to work.
Yet there are couples who still divide up responsibilities in a way that makes one spouse a full-time homemaker and the other the breadwinner. These couples generally file taxes jointly as married people, with one tax return for the two of them. This is one way a parent who doesn't work can file a return.
But it's not the only one. A single person with kids who doesn't work because she has other sources of income must also file IRS returns and report non-wage income.
Filing a Married Tax Return
In some cases, a person with kids who doesn't work may be able to file a joint return with their spouse. This is often the most advantageous filing status. In the United States, filing status is important in calculating the amount of tax a person pays. An individual can file as:
- A single person.
- A married person filing jointly (with the other spouse).
- A married person filing separately (without the other spouse).
- Head of a household.
- A qualifying widow/widower with dependent children.
If an individual is married with children, it is almost always better to file as "married filing jointly" than "married filing separately." Although there may be unique circumstances in which it is preferable to submit separate returns, in the vast majority of cases, it works out best financially for married couples to file jointly. This is especially true if one person earns all the income and the other stays home with the kids.
This is because married joint filers get one of the largest standard deductions each year, which permits the family to deduct a large bite of their income immediately. In addition, they may be able to qualify for multiple tax credits like the earned income tax credit, lifetime learning education tax credits, child and dependent care tax credit, and exclusion or credit for adoption expenses.
Filing a Head of Household Tax Return
If a person is divorced or has never been married but lives with dependent children, he can file a tax return declaring head of household status. A person only qualifies for this status if he paid more than half the cost of living for himself and the children. If he did not support the children, he will have to file as a single person, which is a less favorable tax status with lower standard deductions.
If the person does not work, she has no employment income to report. Employment income is the money a person is paid for personal services. It can include wages, salary, commissions and bonuses, as well as stock options and certain fringe benefits. But not having employment income does not mean that a person has no income. The IRS also requires an individual to report many other types of income. This can include interest, dividends, pension income and business income.
Read More: How to File as a Married Head of Household
Filing Taxes Without Any Income
If an individual has no income at all, he does not need to file a tax return but he can do so if he wants. This can be useful for someone without income but eligible for tax credits.
Generally, these are amounts deducted from your taxes. However, if the credit is more than the amount the individual owes in taxes, he can sometimes claim the excess credit as a refund if he files a tax return.
However, the child tax credit would not be available to a person who earned nothing. It is only available to people who earned an income of $2,500 or more.
- IRS: What Is My FIling Status?
- IRS: Correct Filing Status
- Turbotax: Should You and Your Spouse File Taxes Jointly or Separately?
- IRS: Tax Topics 400
- Pocketsense: Definition of Income for Tax Purposes
- The Street: How Much Do You Have to Make to File Taxes in 2019?
- The Street: What Is the Child Tax Credit and How Do You Qualify in 2019?
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.