Certain categories of persons are exempt from filing annual tax returns. For example, single persons with gross income less than $12,550 do not have to submit their 2021 tax return this year, and retirees with no taxable retirement income do not have to file their 2021 tax return this year.
Even if you are not required to submit a tax return, it is often beneficial. Those in lower-income bands are more likely to qualify for significant tax credits in plain English, resulting in a sizable tax return.
Indeed, the IRS just disclosed that individuals are due $1.5 billion in unclaimed tax refunds for the 2018 tax year – and the time to claim them is rapidly approaching.
Wasn’t it three years ago when the 2018 tax deadline approached?
You may be asking why I’m advising individuals to submit their 2018 tax forms immediately. After all, the IRS deadline for filing a 2018 tax return passed in April 2019, and 2018 forms were due in October, even with extensions.
Certain organizations are not compelled to submit a tax return if they choose not to. This group mostly consists of low-income persons and those who have a negligible possibility of paying the IRS money for the current tax year.
And while you are theoretically required to submit a tax return if your income exceeds the required minimum, the IRS is unlikely to come knocking on your door if you fail to file and are owed a sizable refund.
In reality, consider the tax deadline as the day the IRS desires payment of money owing to them – although they are typically content to keep your money for as long as you allow.
After the first due date, US individuals have a three-year window to file their tax return and receive a refund under current tax legislation.
Thus, the deadline for filing a 2018 tax return and claiming a refund for that tax year is this year’s tax deadline, which occurs on Monday, April 18, due to weekends and holidays.
What type of reimbursement are we discussing?
According to the IRS, the typical taxpayer eligible for an unclaimed refund in 2018 is entitled to around $800. And it is reasonable to assume that many people have unclaimed refunds over that amount.
To mention a few examples:
- If you earned money from a job in 2018, but it was less than the threshold for filing a tax return, you may qualify for the Earned Income Tax Credit, or EITC, which is worth up to $529 (no dependents) or $6,557 (with dependents) (with dependents).
- Suppose you did not file a return but attended college full-time in 2018. You might be eligible for the American Opportunity Credit or the Lifetime Learning Credit if you paid tuition (even if you received student loans).
- For the 2018 tax year, the Kid Tax Credit was worth $2,000 per child, and up to $1,400 of the credit can be repaid even if you owe no taxes.
- I could continue, but I’m sure you get the idea. The simple line is that if you did not submit a tax return for 2018, you owe it to yourself to do so – even if you made little or no money in 2018.
- Collect your income information (if you do not have a tax transcript, you may obtain one from the IRS) and complete a 2018 tax return form, which can be found here. At this point, you’ll need to submit your 2018 tax return, but if you qualify for a refund, you may wind up with a sizable reward for less work.