Taxpayers leave $1.4B on the table.
If you paid a reasonable tax during the year, you may be losing money by not filing. Not to mention eventually the IRS will come knocking. What many taxpayers don’t consider are refundable tax credits that put money in your pocket. Let’s talk about why you should file back taxes.
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It is estimated taxpayers have over $1.66 billion in refunds from their 2018 tax returns. The reason is taxpayers who were eligible for Tax Credits didn’t file their 2018 returns, and, if they don’t file by April 15, 2022 they will lose this money-forever. Now’s the time to revisit 2018 — before it’s too late.
If you don’t file a tax return, the IRS has no way of knowing if you are eligible. Filing a return when you aren’t required may be a good idea. The main reason is a valuable tax break called the Earned Income Tax Credit.
The EITC is designed to help low-income households. Eligibility depends on your income and if you have children in your household. For example, for the 2018 tax year, you get the credit if you file as a married couple filing jointly with no children but earn $20,950 or less. If you have children, the amount you can earn and still receive the credit increases.
The EITC is a refundable tax credit, claiming it could put could get you $6,942 in 2018 if you had children. So, if you didn’t file a tax return for 2018, and think you were eligible for EITC, you should file.
If you owe the IRS they have 10 years to collect, but if they owe you, you only have three years to file and claim your refund. Keep in mind that there’s no penalty for filing a late return if the IRS owes you a refund.
You really have nothing to lose by getting that return together and seeing what it does for your wallet.