Three Reasons to File Taxes This Year — Even if You Don’t Owe Money
Tax season is underway, but with COVID-19 affecting millions of families across the country, from job losses to medical issues, filing taxes may not be at the top of your minds. This year, more than ever, it’s important to file your taxes, especially if you lost work or haven’t received your full stimulus funds. The government has made a lot of stimulus and tax benefits available, and filing taxes can help you claim this money.
Even if you don’t owe money or normally don’t file taxes, here are three reasons to file your taxes this year.
1. Receive Your Full Stimulus Payments
Since the start of the COVID-19 pandemic, the Federal government has sent out two rounds of stimulus checks. If you should have been eligible, but didn’t receive either or both of the payments, the only way to get that money is by filing your taxes. The IRS has also made mistakes, and many Americans haven’t received money from the first or second stimulus payments.
If you didn’t receive the full stimulus amount from either or both of the stimulus payments, it’s not too late! You may be eligible for the Recovery Rebate Credit. The stimulus payments were based on your 2019 income, so if you faced a loss in income in 2020, if you were newly independent in 2020, or if you had additional dependents in 2020, you may receive additional money when you file your 2020 tax return. Read more about how to claim your stimulus payment if you haven’t received it yet.
Even if you don’t normally file taxes (because you’re on SSI or SSDI, you’re retired, or you don’t meet the IRS’s income threshold), you need to do so this year to claim any missing stimulus money.
2. Claim Tax Credits
There are many tax credits that you may be eligible for, from the Earned Income Tax Credit (EITC) to the Child Tax Credit. These credits can mean more money in your pocket to support yourself and your family.
The EITC helps working Americans by issuing them a credit when they file their taxes. If you qualify, your EITC will be based on your income and number of dependents. Read more about the EITC, including some important changes this year and how your EITC may be impacted if you received unemployment benefits.
The Center on Budget and Policy Priorities has a helpful website dedicated to helping you understand what tax credits you may be eligible for and how to claim them.
Use the “Lookback” Feature to Maximize Your Refund
Did you earn less in 2020 than 2019? You could qualify for a bigger tax refund! Congress approved a new “lookback rule” which means you can use either your 2019 or 2020 income on your taxes to get the biggest refund possible this year. Make sure you have your 2019 tax return available when you do your taxes this year.
We’ve also made a cheat-sheet on some great resources we recommend to help you navigate your taxes this year, including all of the ways you can file for free. Keep in mind that if you received unemployment benefits, you may owe taxes on those. If you run into any questions or are unsure whether you need to file, you can connect with other SaverLife members in the forum. Either way, don’t wait to file and claim the money you’re due!