No matter how little you might have earned, or perhaps you were unemployed, it’s still a good idea to file a tax return every year. With certain credits available for low and moderate income earned, and withholdings from your employer, there is the possibility you are due a refund. Even if you are under the filing requirement, you should consider filing a return to claim your withholding and to apply for possible credits.
Presuming taxes were withheld from your pay, you need to file in order to claim any eligible refund you may be due. Because your employer reports the income you made to the IRS, the IRS already knows you were paid and knows what taxes were withheld. The IRS will not issue you a refund until you make the claim for it by filing your tax return. Otherwise, the IRS will keep the refund your owed.
Credits reduce the amount of taxes you pay. It’s deducted dollar for dollar from the tax you owe the government. They can save you a lot of money. Tax credits can be more valuable than deductions when it comes to low income, education and energy savings.
Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a common refundable credit for people who work and have low to moderate wages. It reduces the amount of tax you owe and it may also entitle you to a refund.
Find out if you can claim it with the IRS EITC Assistant. It’s a simple, interactive list on the IRS website.
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