You may be missing out on thousands of dollars in tax credits without even knowing it. According to the IRS, one in five eligible people miss out on claiming the Earned Income Tax Credit (EITC) each year. Many of the people who could use that extra money the most are the ones missing out on a tax credit worth up to $6,431. And that could be a big miss!
The EITC is available to qualified individuals – even if you have no tax liability, if you are not required to file a tax return, or if you are self-employed. You may qualify for the first time, or for more credit, if your hours were cut from full-time to part-time or you were laid off this year. Essentially, if you qualify for it, the EITC returns all or part of the Social Security and Medicare taxes you’ve paid. It’s a refundable credit, which means that the credit will reduce any tax you might owe – and when the credit amount is greater than your tax bill, you receive the excess as a refund.
When it comes to filing a tax return, there are two questions that people care about more than any other: How much will I get back from my tax refund, and when will I get it? While we can’t predict exactly how much you’ll get back from your refund, the answer to the second question is, basically: If you’ve claimed the EITC, you won’t receive a credit or refund before mid-February. This is because of the laws set in place to reduce fraudulent claims for refunds which result in higher taxes for everyone. Beginning last tax season, this law changed the way tax returns with refundable credits are processed to safeguard against fraud. The law mandates that no refund will be released to a taxpayer before mid-February of any tax year, if the taxpayer claimed the EITC. The IRS continues to strengthen identity theft and refund-fraud protections, so patience is essential in waiting to receive your tax refund.
For many hard-working Americans, preparing their tax return is the largest financial transaction of the year. Beware that filing your own income tax return can open the door for unexpected errors, and EITC errors on returns can delay refunds for several months. The greatest value in using a tax professional is in their expertise at getting you the BIGGEST refund you’re entitled to, as soon as possible.
Jackson Hewitt Tax Pros are available to help you get all of your credits and deductions for the maximum refund. Make an appointment today at jacksonhewitt.com.