If you need extra money, filing your tax return — including past tax returns that are now overdue — is a good idea. Historically, about 75% of taxpayers get a refund when they file their tax return. And many taxpayers who didn’t file a tax return during the last few years are surprised to find out that they will be getting a refund.
Your chances of a refund for an overdue tax return from 2019 and 2020 have increased because the IRS recently announced that it is dropping the failure to file penalty (as much as 5% per month for up to five months) to help taxpayers because of the Covid pandemic.
Remember that you generally have only three years to file an overdue tax return in order to claim and collect the refund that might be owed. Talk to a tax professional if you have any questions. Also remember that some people are not required to file a tax return if their income is too low — but if they had any withholding from part time work or other income sources they need to file in order to get those refunds.
You also need to file a tax return to collect various credits and special money for low income Americans.
Since the 2021 tax season really doesn’t end until October 17th of 2022 when extensions expire, be sure you’re not missing out on any 2021 refunds and tax credits. Here are some credits you might be eligible for:
The child tax credit
The child tax credit helps families with qualifying children get a tax break. People may be able to claim the credit even if they don’t normally file a tax return.
Taxpayers qualify for the full amount of the 2021 child tax credit for each qualifying child if they meet all eligibility factors and their annual income isn’t more than:
- $150,000 if they’re married and filing a joint return, or if they’re filing as a qualifying widow or widower.
- $112,500 if they’re filing as a head of household.
- $75,000 if they’re a single filer or are married and filing a separate return.
Parents and guardians with higher incomes may be eligible to claim a partial credit.
The earned income tax credit
The Earned Income Tax Credit also known as the EITC helps low- to moderate-income workers and families get a tax break. If someone qualifies, they can use the credit to reduce the taxes they owe – and maybe increase their refund.
Low- to moderate-income workers with qualifying children may be eligible to claim the earned income tax credit if certain qualifying rules apply to them. People may qualify for the EITC even if they can’t claim children on their tax return.
Other Tax Credits
There are other tax credits that you might qualify for including the Child Tax Credit and the Credit for Other Dependents, and the Child and Dependent Care Credit, and Education Credits, and Recovery Rebate Credit. This is why you should talk to a tax professional. The IRS will also give you this information but we know getting through to the IRS can be a struggle.
FRESH START INITIATIVE AND OFFER IN COMPROMISE PROGRAM
If you didn’t file a tax return for the last few years because of a tax debt issue, you should talk to a tax professional as soon as possible to see if you qualify for the IRS Fresh Start Initiative or an IRS Offer In Compromise Program. These special programs can reduce or even wipe out the tax debt you owe. And if you find out you do not qualify for the Fresh Start Program or the Offer In Compromise Program you might find that another program might help you resolve your tax debt. There are for example payment plans available.
GET A FREE CONSULTATION ABOUT THE FRESH START PROGRAM
You can get a free consultation about the Fresh Start Program and the Offer In Compromise Program from the tax professionals here at Tax Relief Info. In 15 minutes they can tell you if you qualify for the IRS Fresh Start Program of for the Offer In Compromise Program. And if you don’t qualify, they can discuss other ways to resolve your tax debt. This consultation is free. So make the call. Find out exactly where you stand on the IRS Fresh Start Program and the IRS Offer In Compromise Program.
And find out if you are due a refund for tax returns you didn’t file. Remember, the clock is ticking on those refunds from years past — and it’s generally three years from the original April due date of those tax returns.
If you need money, this is where you might find it. And one more tip– file those returns electronically. An electronic return goes directly to the IRS computers, but a paper return could take a year or even longer to be reviewed by the IRS.