Filing income tax returns can be pretty intimidating, and many people dread this period each year. Do you really have to fill out tax returns even if there’s no need to? Here’s something to motivate you—you can get a hefty bonus check from the government if you’re diligent about accomplishing this task.
The first thing to note is that there is a certain income bracket where some citizens aren’t required to file a tax return because their income is not taxed anyway. However, if you’re not included in the bracket, it is important to note that you may qualify for tax credits, and you may get a refund. This means you can get a good amount of cash by filing your tax return.
Here are some reasons that might convince you to get your receipts out and begin the process of filing:
1. Earned Income Tax Credit
Earned Income Tax Credit (EITC) is offered for people within a certain income bracket. If you meet the qualifications for this credit, you must file your tax return to take advantage of it. This credit is classified as refundable, which means that if the amount of the credit is more than the income tax you owe, you will get a refund check from the IRS.
You can check the available tool on the IRS website to determine your qualification. It largely relies on income, as well as your civil status and dependents. For instance, if the pay you earned in 2021 and your Adjusted Gross Income is $15,980 as a single individual, you are qualified. However, if you have three or more children, your income can be as high as $57,414, and you will be qualified for EITC.
2. Child Tax Credit
If you are a parent with a child that’s 16 years old or younger, you may qualify for the child tax credit. The maximum you can get is $2,000 per child with a refundable credit worth $1,400.
If you want to check if you qualify, again, you can go to the IRS website and use their online tool.
3. Recovery Rebate Credit
Even if you did not get your first or second round of stimulus checks in 2020, you may still get paid and claim the recovery rebate credit in your tax return.
4. Withheld Taxes
If you file a 2021 tax return, you might be eligible for a withheld income tax refund taken from the withholding tax your employer paid on your behalf.
5. Taxes Paid
On the other hand, if you are an independent contractor or you are self-employed, you may also have had estimated tax payments in the previous year. If you filed a tax return in 2020, you may apply the refund to your 2021 taxes and lower your tax liability.
Final Thoughts
If you had not filed income tax returns before because you thought you didn’t have to, these mentioned reasons might change your mind. Give it a try for yourself, and if you get used to it, you’ll be able to regularly do your tax returns with no problem at all. And if you can’t fit filing into your busy schedule, you can use taxation software to ease the process.
For the best tax return software, try out Keystone Tax Solutions. We offer professional tax preparation software to take care of the hassle in this complex process. Contact us today for a free demo!
