do you have to pay taxes?

Question

if a person has about 20.000 dollars in a checking account do you have to pay taxes.

Answer 1

If it's not income, you only have to pay tax on any interest, however, you may have quite some exemptions per year which may apply. End result no tax.

Answer 2

I have to pay taxes, but I assume you mean does the person with $20,000 in a checking account have to pay taxes.

A checking account typical does not earn more than 10% interest. A person with no other income and who could not be claimed as a dependent by anyone else would not have to pay income tax. A person with other income might have to pay tax on the total of that income and the income in the checking account. If the checking account earned any interest, a person who could be claimed as a dependent by someone else (whether or not that person did so) might have to pay income tax on the interest, even if the person had no other income.

Answer 3

If the checking account earns interest you have to pay tax on the interest. The bank will send you a 1099-INT after the year ends.

When you file your return the interest would be considered ordinary income and would be added to any other income you received during the year.

Answer 4

You'd pay tax on the interest. The bank will send you a 1099-int form at the start of gthe next year telling you how much interest you got - that goes on your tax return.

If gthe interest from the $20K is yuor only income, you arent likely to owe any tax.

Answer 5

no you already paid taxes on it when you earned it...the only think you would pay taxes on is the interest if there is any.

Answer 6

Maybe!