When the coronavirus crisis erupted back in March, it quickly became clear that Americans would need more time to do their taxes. After all, once the pandemic hit, the public was consumed with layoffs, health concerns, and fears over not being able to stock up on essentials, like canned food and toilet paper. Taxes were the furthest thing on anyone's mind.
It's for this reason that the IRS decided to give filers more time to get their returns completed. Normally, the tax-filing deadline is April 15, and prior to the pandemic, that's when 2019 taxes were due. But in March, that deadline was pushed back to July 15, and many filers took advantage of that extra time -- especially since it meant not having to pay their tax bills prior to mid-July.
Of course, at this point, the July 15 filing deadline has long passed, yet some people still haven't filed their taxes. Now one thing you should know is that if you don't owe the IRS money from 2019, you won't be penalized for not submitting a return, and if your income is low enough, you actually aren't obligated to submit one at all. But here's why it pays to file a return anyway.
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You could have refund money coming your way
Many filers who don't submit a tax return wind up losing out on a refund they're otherwise entitled to. If you're a lower earner, it especially pays to file a tax return this year, even if you missed the deadline. You may find that you're eligible for the Earned Income Tax Credit (EITC), which is a refundable tax credit that could put extra money in your pocket.
Eligibility for the EITC changes from year to year, but here's what the income limits looked like for the 2019 tax year (which is the return you'll be filing in 2020):
|
Tax Filing Status |
No Qualifying Children |
1 Qualifying Child |
2 Qualifying Children |
3 or More Qualifying Children |
|---|---|---|---|---|
|
Single, head of household, or widowed |
$15,570 |
$41,094 |
$46,703 |
$50,162 |
|
Married filing jointly |
$21,370 |
$46,884 |
$52,493 |
$55,952 |
Data source: IRS.
Meanwhile, the EITC could be worth a refund of up to $6,557 if you have three or more qualifying children in your household, so it's worth submitting a tax return even if you're not required to. In fact, if your income is such that you're eligible for the EITC, it also means you're entitled to file your taxes for free.
Even if you're not eligible for the EITC, there are other tax credits you may be entitled to that result in money back from the IRS. The Child Tax Credit, for example, is worth up to $2,000 per child under the age of 17, and a portion of it is refundable.
Don't pass up free money
Many people are struggling financially during the coronavirus crisis. If money is tight in your household, filing a tax return this year could be your ticket to extra cash, so don't pass up that key opportunity at a time like this.
