quote:
I know that workman's compensation is not taxable, but do I still put it on my taxes?
From Pub 17, page 55:
"Amounts you receive as worker's compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a worker's compensation act or a statute in the nature of a workers' compensation act."
(This is referring to amounts paid under federal labor laws through your state's department of labor. The exemption does not apply to retirement plan benefits.)
Two exceptions:
Any payment that reduces your social security or railroad retirement benefits. If you don't get either one of these, or if your SS is not reduced, you don't have to worry about it.
Any payment you receive after you've returned to work may be taxable.
The way I would report it is to enter it on the last line for "other income", give the type and amount on the dotted line (not in the box), and then put a "0" in the box. Call it "worker's compensation", since that's what the IRS calls it (terms vary from state to state).
quote:
If I don't have to list it and it is the only income, can I still claim real estate taxes?
The two have nothing to do with each other, actually. You may only take real estate taxes if you're going to itemize deductions. Itemizing deductions doesn't disqualify you from anything except the "standard deduction". Everybody gets one or the other regardless of their income, and it's up to you which one you choose.
For you, this seems to be a moot point. If you have no taxable income, you won't need to claim any expenses, either, since the tax you owe will be $0.
The real question is do you have to file a return at all?If you're total taxable income is $0, normally the answer would be "no" regardless of how you file.
Here are some reasons why you might want to file:
1) If for any reason you paid federal income taxes during the year and you want a refund
2) You may be eligible to receive EIC even if you don't have kids
3) If you have kids, you may be eligible for the "additional child tax credit"
(Some of these can return a lot of money even if you didn't pay anything in!)
