How do I file taxes when I don't have a job, but still have money coming in?

A gift from a friend is not income and is not reported on a tax return as income

Any  SELL of crypto currency is a capital transaction and has to be reported on a tax return,

if your gains exceed the threshold for having to file a tax return in the first place.

Alright, so I get roughly 1-2k sent to me to pay for bills and stuff a month. I use CoinBase, and use their crypto tax software, and it shows so far I have had 32k sent in and sold so far for me, with a -224 Captial gain since I never held any of it for more than 5 minutes I assume.

So I don't have to do quarterly taxes for stuff like federal and medicare tax, or whatever else that used to be deducted from my pay at my job?

So all I would have to do is do my regular Turbo Tax filing next year before April?

You are not self-employed. Your income from selling cryptocurrency is investment income, not self-employment income. You do not pay Social Security or Medicare taxes on investment income.

If your gross income is over $200,000 (filing single) you might have to pay 3.8% Net Investment Income Tax on part or all of your investment income. Some people mistakenly call this a Medicare surtax, but it is not for Medicare.

Does "a -224 Captial gain" mean you have a $224 loss overall? If so, there should be no need to make quarterly estimated tax payments, unless you did not have enough income tax withheld from your pay when you were working. If you have a significant profit on the cryptocurrency sales, you would have to make estimated tax payments. But that seems unlikely if you always sell the cryptocurrency as soon as you get it. You still have to report the sales on your tax return, though.

Yeah, the crypto tax software that can be integrated with your CoinBase account says I have a $224 loss.

If this is kept up next year, would I have to do anything different as far as income tax goes since I still wouldn't have a job?

And thanks for the reply, really appreciate the help :)!

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@InklebertHumperdink wrote:

If this is kept up next year, would I have to do anything different as far as income tax goes since I still wouldn't have a job?

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As long as you continue to have small losses, and no other income, you do not have to do anything different. You would still have to file a tax return to show the losses, even though you would not have to pay any tax.

You might technically not be required to file a tax return, but there are at least two reasons that you should file.

One reason to file a tax return each year is that the IRS doesn't know that you have a loss unless you report it. They are on the lookout for cryptocurrency transactions that are not properly reported. They get information from Coinbase that shows the amount you received for the sales. But they don't know your basis, so they would think that the full amount that you received is all profit, and therefore taxable income.

Another reason to file a tax return is that, if you have an investment loss and no income to offset it against, you would have a small net capital loss. It wouldn't do you any good that year, but you can carry the loss over to future years. Some day you will have taxable income, and you will be able to use the capital loss carryover to reduce your taxable income. To do this you have to file a tax return every year and carry the loss from year to year until it's used.

Coinbase does not report your sell transactions to IRS.

(This could change in the future)

With only losses, there is no income and no requirement to file a tax return.

The carry forward of tax loss into the future using schedule D may or may not be worth the hassle of preparing the report., which has to come from your own detailed records.

This is your choice.

When not self-employed, the threshold for having to report is around $12,400 dollars of income (Standard Deduction)

So the losses my crypto tax software shows is -$224. This is for captial gains.

In total I've been sent 32k worth of XLM crypto, which I immediately sold for USD, hence why after a while I've accumulated a small loss. I don't hold coins.

I guess my question is, wouldn't I be taxed 12% on the 32k that I've gotten so far? I would pay this next year when filing yes?

You have a generous friend.

There's a big difference between money paid under the table, and gifts.

He's quite a wealthy man. I'm not getting paid under the table by any means cause I'm literally trying to report the income. Please don't accuse.

Would appreciate if someone could answer my last question though. I would have to pay the 12% on this next year before April correct?

"wouldn't I be taxed 12% on the 32k that I've gotten so far"

A gift from a friend is not income and is not reported on a tax return as income, nor as anything else.

I thought you could receive up to 15k gifted in crypto, and anything after that is taxed? Or am I wrong?

You are confused about the rules for gifts.   YOU do not pay tax on money received as a gift.   The person who GIVES the gift is required to file a gift tax form 709 if the gift given to an individual is more than $15K in a tax year.

GIFTS

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return.  Money that you gave as a gift to someone else is not deductible for your taxes.

Turbo Tax does not support the gift tax form 709, but here is a link:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-11-2-million-per-couple/#3226e75d4a4b