Many people go throughout the year leaving money on the table when it comes to filing tax returns. Many feel they shouldn’t file because they earned very little income; CAUTION this could be a huge mistake!
People across the U.S. realize that the IRS has income requirements based on filing status, age, and type of income that needs to be met before you are required to file a tax return. However, many people don’t know that you should file even if the IRS doesn’t require it. Everyone knows that understanding taxes isn’t the easiest thing but a simple check could fatten your wallet. Here are seven points you should consider before deciding not to file:
1. Federal Withholdings From Your Income - Practically everyone allows their employer to withhold Federal and State taxes from their pay throughout the year. Many people even make estimated tax payments or have a prior year overpayment applied to this year’s tax. If this year’s tax is less than your payments you are due a refund.
2. Earned Income Tax Credit - For some tax payers that work but did not earn a lot of money, you may qualify for the Earned Income Tax Credit if you meet all the requirements. The Earned Income Tax Credit is a refundable tax credit that is treated as a payment to help offset taxes and whatever is left over can be used to increase your refund. The Earned Income Tax Credit for tax year 2011 can be as much as $5,751 if you qualify. However, the only way to know if you are eligible for the Earned Income Tax Credit is to file a tax return.
3. Additional Child Tax Credit - This is another refundable tax credit that may be available to you if you have at least one qualifying child and you didn’t get the full amount of the Child Tax Credit.
4. American Opportunity Tax Credit - This partially refundable tax credit is available to students or parents/ guardians that are eligible to claim the student. Students in their first four years of college may qualify for the credit. As much as $1,000 can be refunded back to you for each eligible student.
5. Adoption Credit - If you have adopted a child you may be able to claim a refund on qualified expenses you paid to adopt an eligible child.
6. Health Coverage Tax Credit - Eligible candidates must be a Pension Benefit Guaranty Corporation payee or Trade Adjustment Assistant recipient who receives Trade Readjustment Allowance (TRA) or Unemployment Insurance in lieu of TRA. If you qualify and pay 100% of your health plan premiums throughout the year, you can claim and be refunded 65% of your payments on your tax return.
7. First Time Homebuyer - Service members that meet certain time periods outside the United States on qualified extended duty may qualify for up to $8,000 if they meet requirements for the First Time Home Buyers Credit.
As you can see, it can possibly cost you thousands of dollars if you decide not to file without looking into it. TaxSlayer.com can help by simply starting a tax return and letting our software guide you on your way to ensuring you receive the maximum refund possible. We guarantee it!