3 Things You Should Know About Income Tax Returns

It’s tax season. Income tax returns must be filed with the IRS by April 18. Here are some important things to know about filing Federal income tax returns:

1. Even if you’re not required to file a tax return, it may benefit you to file one. If your income falls below a certain level (which varies depending on whether you’re married, single, caring for dependents or over 65 years old), you are not required to file a tax return. But, even if you did not pay any taxes in 2015, you might want to file a return because you could be entitled to a valuable refund:

a. Withheld taxes: Maybe you noticed that your employer withheld amounts from your paychecks for income taxes. You may be entitled to a refund of some of those amounts.                                                                    

b. Earned Income Tax Credit (EITC): If you worked but did not earn a lot of money, you may be entitled to the EITC. Each year, billions of dollars in Earned Income Tax Credits go unclaimed.  Last year in Florida, the average EITC amount was over $2,500.

c. Child Tax Credit: Low and moderate income taxpayers can claim a credit of $1,000 for each qualifying dependent child to reduce the amount of taxes owed. If the amount of the credit exceeds     the amount you owe in taxes, you may be entitled to receive an Additional Child Tax Credit.

d. Other tax credits: You may be eligible for additional tax credits if you had a job, if you were a college student or a first-time home buyer in 2016.

2. You don’t have to pay someone to complete your tax return. If you earned less than $62,000 last year, you can get your tax return completed and claim your refund and tax credits for free at tax preparation sites staffed by volunteers for the United Way Suncoast or AARP. If you prefer to prepare and file your own tax return, a free online tax app is available at www.myfreetaxes.com.

3. The commercial tax preparation services (like those that wave their signs along the side of the highway) are not free. They will prepare and file your tax return and even give you cash immediately in anticipation of your refund, but they will keep $200 or more of your refund to pay for their services. If you file your return with the free services offered by the United Way and AARP or do it yourself through MyFreeTaxes.com, you won’t walk away with cash immediately, but you can usually get your refund in 3 weeks or less. If you provide your checking account information with your tax return, the IRS will deposit your refund directly into your checking account. And the IRS offers a mobile app and an online tool that lets you check the status of your refund after you file your return. For more details, check out the IRS Frequently Asked Questions about Refunds.

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