Taxpayers have been allowed to file their 2021 tax returns with the Internal Revenue Service (IRS) since Jan. 24. The agency began this tax season weeks earlier than normal because of problems likely to arise when people try filing their returns this year—namely a backlog of millions of returns from last year and the complication of new policies and tax credits. This has also prompted the tax agency to fire off several warnings to taxpayers. On Feb. 8, the IRS posted a new alert, warning some people to avoid one behavior this year that they might have done years prior. Read on to find out about the latest warning.
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The IRS is warning you not to skip filing your taxes this year even if you're not required to.
iStockWhile tax season is hectic for millions, not everyone is required to file a tax return every year. According to Turbo Tax, this occurs when someone under the age of 65 is single and their total income for the year doesn't exceed a certain threshold. But on Feb. 8, the IRS sent out a new announcement, warning these people not to skip filing this year because of a number of new tax benefits created by the American Rescue Plan and other recent legislation.
"Often, individuals and families can get these expanded tax benefits, even if they have little or no income from a job, business or other source," the IRS said. "This means that many people who don't normally need to file a return should consider doing so this year."
There are multiple new tax benefits available to filers.
iStockPeople who file a tax return this season could be in line for several new tax benefits. For parents, this includes an expanded Child Tax Credit, which families can claim even if they received half of the credit in advanced monthly payments last year, and an increased Child and Dependent Care Credit that awards a credit up to $8,000 for working families that pay for daycare.
But single filers, who are more likely to not typically file a return, also have access to other benefits like the Earned Income Tax Credit (EITC), the Recovery Rebate Credit (RRC), and a deduction for gifts to charity. The American Rescue Plan raised the EITC for childless workers and implemented the third-round of stimulus payments as well, which people can still receive if they haven't already by claiming the RRC.
Any cash contributions made to charities in 2021 can also be taken as a deduction this year, with married couples filing jointly allowed to deduct up to $600 in cash donations and individual taxpayers eligible to deduct up to $300. The IRS is emphasizing that all of these credits and benefits "are only available to people who file a 2021 federal income tax return."
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The IRS says you should file your return electronically.
iStockAccording to the IRS, "claiming these benefits could result in tax refunds for many people." So even those who don't normally file should do so this year, and the best way is by filing your return electronically and choosing direct deposit. This will help you to "avoid processing delays and speed the delivery of [your] refund," the agency explained
"You will usually receive your refund within three weeks of the date when the IRS receives your return—even faster if you elect to have it directly deposited into your checking or savings account," the IRS states on its website. If you file by paper, the agency says that staffing issues will likely result in the processing of your return taking several weeks longer than it would if you file electronically.
And if you don't normally file, you might be eligible to file online for free.
iStockMost people who don't normally file returns are typically exempt because their income is not high enough. Those same people likely fall under the income requirements for free filing with the IRS. The agency's Free File allows certain taxpayers to prepare and file their federal income online at no cost using guided tax preparation with an IRS partner site.
"Only taxpayers whose [adjusted gross income] is $73,000 or less qualify for a free Federal tax return using IRS Free File guided tax preparation," the agency says.
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