The IRS officially opens for tax filing season today on January 24th. Even if you are not required to file a 2021 tax return under IRS rules, doing so may put additional money in your pocket. The IRS recently reminded Americans of five important opportunities that are only available to those who file.
CLAIM A REFUND OF TAXES WITHHELD: If federal income tax was withheld from wages or other payments you received in 2021, the amount withheld may be more than you owe. By filing a return, you can claim an IRS refund of any excess withholding.
EARNED INCOME TAX CREDIT (EITC): If you earned income in 2021 (for example, as an employee or through gig economy work) and your total income was below $57,414, you may qualify for this credit. The online EITC Assistant (link below) can help you determine your eligibility.
CHILD TAX CREDIT (CTC): You may be eligible to claim this credit if you have dependent children under age 18. The standard credit amount is $3,600 per qualifying child under age 6, and $3,000 per qualifying child age 6-17.
RECOVERY REBATE CREDIT: If you did not receive a third economic impact payment (EIP) in 2021, or if you got a smaller EIP than you were entitled to, you may be able to claim this credit. (Note: EIPs were also sometimes called stimulus payments.)
AMERICAN OPPORTUNITY TAX CREDIT (AOTC): If you paid higher education expenses (tuition and school fees) for yourself, your spouse or a dependent, you may receive reimbursement for some of those expenses through the AOTC.
All of the above credits are wholly or partially refundable, meaning that you can receive the credit as an IRS refund even if you do not owe any tax. A tax professional can help you determine whether you qualify for a refund, and if so, help you claim it by filing a 2021 tax return.