Do I still need to file if I owe nothing and not getting a refund. What about if I have Roth, do I need to file?

[PhatFrancis]

Hi,

For 2024, my son's W2- income is less than 1K.  In 2023, he filed a return   (income 4K) , and he also  contributed to Roth IRA. This year I took a 529 distribution to cover  his eligible college expenses.  His current 2024 return shows zero for IRS and State. I have a couple of questions please:

 1.  Does he still need  to file a return this year as he owes nothing and not getting anything back?

 2.  If he doesn't  have to file because he has no tax liability, does he still need to file  to both state and federal because he has contributions to Roth IRA

 3. Does filing the return yearly  help keep track of the Roth contributions? Do contributions to Roth IRA need to be reported? What is the advantages of reporting it?

 Thanks for your advise

[KrisD15]

1. No, he would not need to file if he only had W-2 income and that was less than 1,000. (if he had investment income as well, that number could change)

2. No, Roth contributions are not reported on a tax return unless the contribution was more than the allowed amount. The contribution he made to his Roth account could not have been more than his earned income. Scholarship income can count towards Roth (and traditional) IRA contributions.

3. Yes,  TurboTax can keep a running balance of your basis in Roth accounts if you enter that information. 

No, contributions do not need to be reported n your tax return unless the contribution is over the limit and a penalty applies. 

HERE is a TurboTax link about the advantage of reporting Roth contributions. It could trigger a "saver's credit" for the taxpayer.