I'm guessing that most homeless people don't file taxes.
Homeless people (those who were born in the USA, at least) have social security numbers. They sometimes have encounters with hospitals and are in records systems of other entities. Some of them have prepaid Visas from Wal-Mart or things like that. The point being that homeless people are on the grid, to a lesser or greater extent.
Since they're concentrating on staying alive (in their own backwards way), the homeless are not concerned with filing taxes. But the IRS is certainly aware of their existence, if not their individual situations of homelessness. So what happens to their cases? Do homeless people ever get audited?
The problem from an accounting viewpoint isn't that the homeless are accepting charity, whether private or via government programs. Nor is it illegal to be unemployed, last I checked (for that, go to Belarus). It seems to me that the real problem is that they /don't file/. Unless there's laws or practices I don't know about where the IRS goes after deeper pockets or something.
So how does this work /biz/? Any CPAs here? Not that it matters but I'm just wandering through the board and this occurred to me.
If someone had been stealing their identity / social security number, then maybe it's possible (though unlikely). They don't usually file taxes anyway. Unless they manage to hit the first tax bracket ($10,300) with some kind officially reported income. Even then most would still ignore filing anything. Audits are quite rare for people at lower income levels.
It's sort of the same working in the underground economy. They get paid in cash and don't have to file anything. Can still sign up for food stamps and other benefits. They just need to be careful about depositing cash into actual banks though since they can get flagged in certain cases.
Thanks for the answer, also general bump.
Another wrinkle to this that we've both hinted at but which hasn't been said outright is (something missing from my knowledge base): For the very low-income/extreme poor, they don't have to worry about filing at all? I would expect that adults in general need to file every year, regardless of employment status.
I remember being a paperboy as a kid and making maybe <$3000 USD/yr disposable income from that, and mom would tell me that she actually filed for me around that time.
The amount of income the fed loses by not receiving tax returns from homeless people is so small it's not even worth auditing them.
>The PR backlash would be unimaginable
>The cost would never make up for the benefits by a dozen orders of magnitude
>The IRS is already swamped by budget cuts
Are the homeless possibly breaking the law by not filing? Possibly. But if no one is interesting in enforcing something can you really call it a law?
If you don't owe taxes, then you don't have to file taxes. The system makes sense if you know what your taxable income is. To encourage lower income people filing you have the earned income tax credit.
Just to clarify (and FWIW), I am the OP and this post >>1091694 is not from me.
However the 2200 number that got tossed out is interesting in that it's quite close to my paper route number (which I estimate to exceed it). This would explain why mommy filed for me when I was a kid.
Basically you dont have to file a federal tax return if your income is less than the standard deduction and personal exemption (with a few exceptions for self employment and the like). So $10,300. But you should file anyway as you'll get all your withholding back.