Every year, over a million American citizens fail to file a tax return. By failing to file, many of these people risk losing any refund they are due, which, according to IRS estimates, averages more than $600.
Procrastinators have three years to file a return and receive a refund under the statute. The three-year countdown begins on the return’s initial due date or, if an extension was filed, the due extension date. Late filers who owe no taxes pay no penalties and may be eligible for credits in addition to the money withheld from their paychecks.
Why Should You File Your Overdue Tax Return Now?
Save Money By Avoiding Interest And Penalties
To avoid interest and late payment penalties, file your past due return and pay it now.
Request A Refund
If you don’t file your return, you risk losing your refund. If you are due a tax refund for withholding or anticipated taxes, you must claim it within three years after the due date on your return. A right to claim tax credits, like Earned Income Credit, is subject to the same rule.
We put a hold on income tax refunds if our records reveal that one or more returns are past due. We keep them on hold until we get the past due return or a valid excuse for not submitting one.
Benefits From Social Security Should Be Protected
Any self-employment income you generate will not be reported to the Social Security Administration, and you will not receive credits toward Social Security retirement or disability benefits if you are self-employed and do not file your federal income tax return.
Avoid Having a Hard Time Getting a Loan
If you don’t file your tax return, your loan approval may be delayed. When you wish to buy or refinance a home, acquire a business loan, or apply for federal help for higher education, copies of your tax returns must be given to financial institutions, mortgage lenders/brokers, and so on.
Unfiled Tax Returns: IRS Enforcement Actions
Various IRS enforcement activities may begin in the background if someone has a filing requirement but does not file their federal income tax return. For example, if the IRS receives enough revenue from third parties such as employers, vendors, banks, and other financial institutions, the IRS will produce a substitute for a return on the taxpayer’s behalf. If you’re thinking, “Eureka!” and planning to never file another federal return again, hold out for a little longer. Many deductions, including mortgage interest, property taxes, and charitable contributions, are not taken into account by return substitutes.
They don’t take into account children or the benefits that come with claiming the little darlings. In short, substitutes for returns are rarely beneficial to the taxpayer, and the tax due is frequently overestimated. The collection statute of limitations begins after the IRS assesses the tax on a substitute for return. The IRS has ten years from that point to launch enforcement procedures and try to recover the tax owed. The IRS will continue collection enforcement operations on the assessed tax due from the substitute for return until the taxpayer submits their own return (via an audit reconsideration) and claims any applicable deductions and credits or pays the tax due.
Withholdings On Taxes That Were Forgotten
The Internal Revenue Service (IRS) establishes minimum gross income thresholds below which taxpayers are not required to file a return. For example, unless special circumstances apply, taxpayers under the age of 65 who are unmarried and earned less than $12,400 or heads of households who earned less than $18,650 have no requirement to file their 2020 taxes.
These non-filers may have been unaware that their employer withheld income tax during the year, resulting in money owed to them by the IRS. Furthermore, because of their modest income, they may be eligible for tax credits that may only be obtained by submitting a tax return. Non-filers also miss out on the Earned Income Tax Credit, or EITC, if they don’t file.
Simply because you are not compelled to file a tax return does not mean you should not do so. It’s possible that you’re missing out on a tax refund.
Has the notion of keeping up with the IRS brought a tear to your eye? Does the prospect of sifting through masses of paperwork on your own, unclear of what documentation you’ll need to resolve your IRS issues, make you want to give up and accept the IRS’s assessment? Kian Finance Authority’s team of professionals is equipped with a thorough understanding of the Tax Code along with years of experience working with the IRS and state tax agencies. Don’t give up because you’re worried about taxes; you’ve got this! Begin your initial consultation right away with Kian Finance Authority, the best Florida tax service.