Don’t Usually File Taxes? Here’s Why You May Need To

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If you don’t typically file an income tax return, this may be the year to do so. According to the IRS, filing can help you claim a refundable tax credit or get an income tax refund in certain circumstances.

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In many cases, income, filing status and age determine if you must file a tax return; however, there are other rules that may apply if you’re self-employed or if you can be claimed as a dependent of someone else. There are other reasons to file, the IRS says, and the Interactive Tax Assistant can also help you determine if you need to file a return.

According to the IRS, here are a few questions to ask yourself to determine if you’re due a refund:

  • Did your employer withhold federal income tax from your paycheck?
  • Did you make estimated tax payments during the tax year?
  • Did you overpay last year on your taxes and have it applied to your 2021 tax?

If you can answer yes to any of these questions, then you may be due a refund.

Earned Income Tax Credit

You may also be eligible for the earned income tax credit (EITC) if you earned $57,414 or less last year. The EITC ranges from $1,502 to $6,728 depending on your filing status and how many children you claim on your tax return. You may use either your 2020 or 2021 income to calculate your EITC, and choose whichever amount gives you a larger credit. Use the EITC Assistant on IRS.gov to determine your eligibility.

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Related: Tax Prep 2022: AARP Offers Free Assistance — What Documents Will You Need To Provide?

Child Tax Credit or Credit for Other Dependents

If you have qualifying children under the age of 17 and meet other criteria, you may also be eligible for the child tax credit or credit for other dependents. This includes people who have:

  • Dependent children who are age 17 or older at the end of 2020.
  • Parents or other qualifying individuals they support.

Use the Child-Related Tax Benefits page of IRS.gov for more information.

Education Credits

You could be eligible for the American opportunity tax credit or the lifetime learning credit. To be eligible, you, your spouse or your dependent must have been a student enrolled at least half time for one academic period. You may qualify even if you don’t owe taxes. Use Form 8863, Education Credits to claim the credit when filing your tax return.

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Recovery Rebate Credit

If you didn’t qualify for the third Economic Impact Payment — or got less than the full amount — you may be able to claim the 2021 recovery rebate credit based on your 2021 tax year information. If you’re eligible, file your 2021 tax return and the credit will lower any tax liability for 2021, or be included in any tax refund.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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