would this be possible?

[happyscooter]

say you had no mortgage or car payment. your health insurance is through your employer which you have retired from. monthly bills equal $500-600. If you had money in savings to live off of for 2 years without working, how would you file income taxes? what would your income be?

[phil5185]

Sure it's possible. No need to file at all, there is a low income limit. And SS is not taxed - so some retirees that live on SS & savings do not file a Tax Return.

[happyscooter]

i guess i would be worried that the irs would think someone couldn't live on just savings, no ss and audit them. maybe working under the table or whatever.

phil, you rock.

[hoops902]

Jun 18, 2011 14:14:25 GMT -5 happyscooter said:

i guess i would be worried that the irs would think someone couldn't live on just savings, no ss and audit them. maybe working under the table or whatever.

phil, you rock.

They might audit you, but why would that worry you? What are they going to find if you're being honest about it? They can't just say "we have no proof of anything, so we'll just assume you make $XXXXX and tax you on it".

[DVM gone riding]

as long as the withdrawals from your savings appear to match your std of living they aren't going to have an issue, they might "audit" you but you won't be in trouble. Most IRS audits are brief and straight fwd people worry about that WAY to much. There is no law that says you have to file a tax return. Just that you have to pay taxes. Lots of people that would get money back don't file. the irs might think they are crazy but doesn't demand they file a return.

[cronewitch]

Many people live on savings some with parents while students or disabled or to take care of others. Some people just live cheap like a live in housekeeper with no car might earn very little and not need to file.

Some households of unmarried adults might have one own the house and work and the other live free. Their isn't a law saying you have to work and if you parent or child or lover wants to support you they can.

You can quit your job, not have insurance and live in a tent if a friend's back yard or under the overpass or backpack across Europe. You could live off savings or gifts or credit cards or sell your house and use the proceeds or sell your gold coins when you need more money.

[happyscooter]

hoops902, you don't know my luck.

[NoNamePerson]

Do you have a pension from employer? Don't know what state you are in but it could be taxable.

[qofcc]

If you have any money in taxable retirement accounts, then any withdrawals would be taxable. Any interest you earn on your saving account, no matter how minimal is taxable. Even if you only earned $10/year in interest, I would make sure to report the income and file a tax return even if not legally required to. You're not required to report your income if it's below the threshold, but they're required to accept your return if you submit it. If you were ever in a situation where you had to go back and prove your income for a number of years (I'm going through this with my Dad for Medicaid - could also apply to loans, etc.), it's easy to show a tax return that proves you didn't earn much money, but it's a lot more difficult to prove you didn't need to file.

[happyscooter]

noname-too young for the pension and REFUSE to take it and pay taxes and penalty.

qofcc-too young for the IRAs and 401Ks also.

Oh you can be sure that I report every single thing. $2.00 in interest for a savings account. Yes sir that goes right on the forms.