Not quite sure if you have to file a federal tax return this year? The amount of your income, filing status, age and other factors determine if you must file.
Even if you don’t have to file a tax return, there are times when you should. Here are 5 good reasons why you should file a return:
1. Tax Withheld or Paid. You could be due a refund if:
a. Your employer withhold federal income tax from your pay
b. You made estimated tax payments
c. You received a refund last year and applied part or all of it to this year’s tax.
But you have to file a tax return to get it!
2. Earned Income Tax Credit. Did you work and earn less than $51,567 last year? You could receive EITC as a tax refund if you qualify. Families with qualifying children may be eligible for up to $6,044. Use the EITC Assistant tool on IRS.gov or contact me to find out if you qualify. If you do, file a tax return and claim it.
3. Additional Child Tax Credit. Do you have at least one child under the age of 17? You may qualify for the Child Tax Credit. If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit. To claim it, you or your tax preparer need to file Schedule 8812, Child Tax Credit, with your tax return.
4. American Opportunity Credit. Are you a student or do you support a student? If so, you may be eligible for this credit. Students in their first four years of higher education may qualify for as much as $2,500. Even those who owe no tax may get up to $1,000 of the credit refunded per eligible student. IRS Form 8863, Education Credits, must be filed with your tax return to claim this credit.
5. Health Coverage Tax Credit. Did you receive Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation? If so, you may qualify for the Health Coverage Tax Credit. The HCTC helps make health insurance more affordable for you and your family. This credit pays 72.5 percent of qualified health insurance premiums. Visit IRS.gov for more on this credit.
To sum it all up, check to see if you would benefit from filing a federal tax return. You may qualify for a tax refund even if you don’t have to file. And remember, if you do qualify for a refund, you must file a return to claim it.
Jéneen R. Perkins is a freelance accountant and consultant serving entrepreneurs, families and small businesses. She prides herself in being fluent in English instead of “Accountant-ese”.
"Putting My Money Where My Mouth Is" is a journal about real life experiences and concerns of Jéneen R. Perkins. The purpose of the blog is to exhibit the real life challenges and answer the tough questions posed by the concepts of business, entrepreneurship and money.