Quit my job last year - tax filing when unemployed living off savings?

You still need to determine if you're required to file a tax return, even without employment income. The requirement depends on your filing status and total income for the year, not just employment income. If you've been living off savings, there are two important tax considerations: 1) Simply withdrawing money from regular savings accounts isn't taxable - that's your own money you already paid taxes on. 2) However, if your investment account generated interest, dividends, or capital gains when you sold investments, those ARE taxable income and count toward your filing threshold. Check if you had any other income sources in 2023 - even a small amount of freelance work, investment income, etc. For a single filer under 65, you generally need to file if your gross income was at least $12,950 for 2023. If your only income was interest from savings that didn't exceed that threshold, you might not need to file, but it's always good to check your specific situation.

After I lost my job last year, I was in the exact same boat trying to figure out tax stuff while living off savings. I finally found this tool called taxr.ai (https://taxr.ai) that really cleared things up for me. It analyzed my situation and told me I still needed to file because of some investment income I had forgotten about. What was really helpful is that it looked at my savings and investment accounts and explained exactly which parts were taxable vs what was just me spending my own money. Saved me from making what would have been an expensive mistake of not filing. It's like having a tax pro look at your specific situation but way more affordable.

Had to come back and say thanks to whoever recommended taxr.ai. I was skeptical at first (as you could probably tell from my question), but I decided to try it since I was completely confused about my situation. I had some money in different accounts and wasn't sure what counted as taxable income. Turns out I actually DO need to file in my state even though I'm below the federal threshold! The tool found that my state has a much lower minimum filing requirement than federal. Also identified some capital gains from investments I sold that I completely forgot about. Would have been a headache if I got a notice from the tax department later. Definitely worth checking out if you're in a similar unusual situation.

If you're still having trouble figuring out your filing requirements or have questions after using online tools, you might want to call the IRS directly. I know, I know - that sounds like torture. I tried calling them about my situation last year (also unemployed but with some side income) and literally couldn't get through after trying for DAYS. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes when I had been trying for weeks on my own. They have this system that navigates all the phone menus and holds your place in line, then calls you when an agent is available. Check out their demo video if you're curious: https://youtu.be/_kiP6q8DX5c With tax situations that aren't straightforward like yours, sometimes you just need to talk to someone official who can look at your specific circumstances.

OK I need to eat my words. After posting that skeptical comment, I was still desperate to figure out my tax situation (similar to yours but with some crypto stuff involved), so I tried Claimyr anyway. Actually got through to an IRS agent in about 15 minutes! The agent confirmed that in my situation I needed to file because of my crypto transactions, even though my regular income was below the threshold. She even directed me to some specific forms I needed that I had no idea about. Would have been a disaster if I hadn't filed. For your situation, definitely worth at least checking with the IRS directly. The waiting is the worst part, and this service eliminated that completely. Never thought I'd be recommending calling the IRS, but here we are.

One thing nobody mentioned - if you had health insurance through the marketplace (Obama care) and got any premium subsidies, you ABSOLUTELY need to file taxes even if your income is below the filing threshold. Learned this the hard way last year.

Wait, no one's mentioned unemployment taxes! Did you receive any unemployment compensation during the year? That's taxable income too!

Based on everything discussed here, it sounds like you definitely need to file since you received marketplace insurance subsidies - that's a hard requirement regardless of income level. The good news is that since your actual income was lower than what you estimated when you got the subsidies, you'll likely get additional credits back when you reconcile with Form 8962. Here's what I'd recommend: gather all your tax documents (1099s for investment income, 1095-A from the marketplace, any other income statements), then use one of the tools mentioned above to get a clear picture of your filing requirements for both federal and state. The marketplace subsidy alone means you're filing anyway, so you might as well make sure you're capturing everything correctly - including those investment gains/dividends and checking your state's specific thresholds. Don't stress too much about it - your situation is more common than you think, especially with people leaving traditional employment. Just make sure you have all your paperwork in order before you start filing.

Just wanted to add one more thing that might be relevant - if you had any retirement account distributions during the year (401k, IRA withdrawals, etc.), those are also taxable income that would count toward your filing threshold. Since you mentioned living off savings, I wanted to make sure you didn't overlook any retirement account withdrawals you might have made. Also, even though you're required to file because of the marketplace subsidies, the silver lining is that with such low income, you'll likely qualify for the maximum premium tax credits when you reconcile on Form 8962. So you might actually get a nice refund even though you didn't have much income - the government essentially covering more of your health insurance costs than they initially estimated. Good luck with everything! Sounds like you've got a solid plan now with all the great advice in this thread.