We didn't file our taxes in 2005 because we didn't make any money... or so we thought. I was a student and we were living off loans, so we thought we'd save ourselves the trouble. Well, after filing for 2006 taxes and getting a hefty refund thanks to the earned income credit, I wondered if we might have qualified for a refund for 2005 without realizing it. We headed over to H&R Block to figure it out.
The final numbers for 2005 are not in yet, but it turns out that we did have a tax liability for that year thanks to... free stuff. That's right. I got a couple thousand dollars worth of free stuff out of my Internet offer searching and it is taxable income. But it's not your garden variety of income, the kind that would easily be wiped out by a standard deduction for a three person family. No, it's taxed specially and separately and no deduction applies (according the HR Block dude).
So, all that fun free stuff is going to cost me after all. What a rip off!
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