Didn't file taxes? What if the IRS owes you?
Some families that aren't required to file tax returns because of low incomes might want to file anyway to collect the earned income tax credit. It's not too late.
This post is by Tom Herman of The Wall Street Journal.
Answer: You might be missing out on a valuable federal program designed to help the working poor.
Welcome to the earned income tax credit, or EITC. It's known as a "refundable" credit because, unlike many other tax breaks, you can get money from Uncle Sam even if you don't owe a penny in tax.
But to collect, you have to file a tax return. Even though April 15 has come and gone, it isn't too late to act.
The amount of the credit varies depending on your income, family size and "filing status" (such as single or married filing jointly). The average credit amount last year was around $2,200, the Internal Revenue Service says.
More than 27 million workers and families received a total of nearly $62 billion for the 2011 tax year. Even so, about one in five of those eligible miss out on this credit, according to IRS estimates.
Some people may have overlooked the credit when they filed because they weren't aware of its existence or couldn't understand the rules. Or perhaps they didn't think of it because they weren't obligated to file. For help in checking on eligibility, go to the IRS website and look for "EITC Assistant."
When checking to see whether you might be eligible, don't focus only on last year. You might also have time to file for a prior year that you overlooked. To file an "amended" return, use Form 1040X. Generally, you have to file Form 1040X to claim a refund within three years of the date you filed your original return.
The IRS site also has details on free-filing options. Look for "Free File," free tax preparation sites (or call 800-906-9887), or IRS taxpayer assistance centers.
More from The Wall Street Journal and MSN Money:
- 'Don't just spend it'—smart moves for your tax refund
- IRS schedules furlough days
- What kind of investor are you?
- Tax refund may be bad for your finances
- Tired of giving the government an interest-free loan?
- The 'Dirty Dozen' tax scams of 2013
Taxes are essential in making America function. Federal and state taxes generate revenue that should stimulate the economy and create jobs. However, in the state of Missouri our current Governor has a tax offset law which intercepts the taxpayers income tax refund. This is done if you owe a debt. However, what if the debt is not owed. The taxpayer is harmed not the state.
Please tell me what you think about this.
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