No income? Three reasons you should still file a tax return

COLUMBIA, Mo. – There are three good reasons why you might want to file a tax return even if you didn’t have income.

First, you might avoid an audit from the Internal Revenue Service by filing a return, says University of Missouri Extension financial planning specialist Andrew Zumwalt.

“The statute of limitations for a tax return is generally three years from either the due date of the return or the date the return was actually filed, whichever is later,” Zumwalt says. “If a taxpayer omitted more than 25 percent of his gross income, then the limitation is extended to six years.”

“If your income is low enough that you do not need to file, then it is extremely unlikely that the IRS would later request that you pay tax. However, by filing a simple tax return, the statute of limitations starts to run out, and the unlikely chance becomes a zero percent chance,” Zumwalt says.

Zumwalt notes, however, that there is no statute of limitations on fraudulent returns.

There are other good reasons to file a tax return even if you made little or no money. You might discover that your identity has been stolen.

“I recently had an older client whose return was rejected by the IRS because a return had already been filed with her listed as the spouse even though her husband died several years earlier,” Zumwalt said. Identity thieves filed a fraudulent return.

Zumwalt helped her prepare a Form 14039, Identity Theft Affidavit, to alert the IRS that her name and Social Security number had been used fraudulently. To provide another level of authentication, the IRS issues identity theft personal identification numbers to taxpayers who have been victims of identity theft.

Another reason to file tax returns is that you might get a refund. Even if you are not required to file, you might qualify for a refund through refundable tax credits as the earned income credit, the additional child tax credit and the American opportunity credit.

Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) are two free services offering help with tax preparation and filing. VITA focuses on people who make $52,000 or less. TCE focuses on people over 60 years of age. To find a VITA or TCE site near you, visit the IRS locator tool at irs.treasury.gov/freetaxprep.

An online alternative is www.myfreetaxes.com/motax, which offers free help for people with incomes of less than $58,000.

For more information from MU Extension on taxes and other financial topics, go to www.missourifamilies.org/money.