It’s not mandatory for everyone to file a federal tax return. If your income was below a certain threshold last year, you may not be required to file a return this year either. We all know how tedious and confusing it can be to do your taxes. If you have a free pass to avoid the hassle this year, you should take it, right?
The thing you may not know, however, is that even if filing a return isn’t compulsory, it can still be extremely beneficial to your bottom line. Here’s why:
Unclaimed refunds
Even if your earnings were low last year, you could still be due a refund—particularly if federal taxes were withheld from your pay. Often this refund can amount to several hundred dollars. If you don’t file a return, you miss out on the money you’re owed.
However, it’s worth noting that you have a bit of leeway to claim your refund: three years from the original due date. Tax day is on April 17 this year, so you would have until April 17, 2021 to claim your 2017 tax return refund. After that, you lose the money for good—and it becomes the property of the U.S. treasury.
Unclaimed tax credits
In addition to losing your refund, you could also stand to lose out on other valuable tax benefits, such as the Earned Income Tax Credit, which could be worth a few thousand dollars. The only way to claim this money is to file a federal income tax return.
For more information on the advantages of filing a return and expert advice on qualifying tax breaks, it’s worth consulting with an experienced tax attorney.