My friend lost his job over a year ago and has been living off his savings. He owns a house and usually makes several deductions when he files. What will he need to do when it's time to file?
2007-11-30 17:25:20 · 7 answers · asked by maggie 2 in Business & Finance ➔ Taxes ➔ United States
I forgot a crucial part- he collected unemployment for 6 months..i think this is why he is worried?
2007-12-01 04:59:25 · update #1
If has no income, he doesn't "need" deductions.
He could, however, roll some (say $10,000) IRA money to a ROTH IRA. This would give him "income," but little or no tax liability (and still leave the money available for retirement).
Eg, add up the schedule A and his personal exemption. Then rollover that much money by December 31st. If he's like me, he deferred the tax when he was in a much higher tax bracket so he's already gotten a benefit.
2007-11-30 17:31:30 · answer #1 · answered by Anonymous · 2⤊ 0⤋
If he doesn`t have an income, then there were no tax deductions, all he will have to claim is interest earned on his savings. But if u make less than a set amount of money, then u don`t even have to file an income tax form. If he lost his job over a year ago then he would have already filed his taxes last April for the months of the last year he worked. If he didn`t work all of 2007, then what does he have to file, unless he drew unemployment checks since losing his job.
2007-11-30 17:51:56 · answer #2 · answered by flamingo 6 · 1⤊ 0⤋
Unless his interest income on the savings exceeds the filing requirement amount he has no need to file. Therefore the deductions have no value to him for this tax year. And with no earned income there will be no refundable EIC as alluded to by another poster.
"v b" does offer a creative means to roll traditional IRA monies into a Roth IRA though. I'll keep that one in mind!
2007-11-30 21:37:05 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 1⤋
Your deductions can only reduce your taxable income - so if you have no income, the deductions don't do anything for you.
2007-12-01 02:29:47 · answer #4 · answered by Judy 7 · 2⤊ 0⤋
not sure. possibly list the earned interest off of his savings
2007-11-30 17:29:08 · answer #5 · answered by GG 7 · 0⤊ 0⤋
OH LETS THINK ABOUT THIS MAYBE HE SHOULD FILE ARE YOU COULD BE HIS ***** AND FILE FOR HIM AND DON'T FORGET TO FILE FOR CUSTODY OF THE REST OF THE STASH YOU HAVE BEEN STASHING AND BE SURE TO GET SOME KIBBLE WHILE YOUR OUT MR BEEZATCH
2007-12-01 00:34:55 · answer #6 · answered by SADATED/MEDICATED/OVER RATED 1 · 0⤊ 1⤋
Other than the EIC, I believe you loose them.
2007-11-30 17:28:03 · answer #7 · answered by wcowell2000 6 · 0⤊ 2⤋