March 18, 2021
Tax season is coming up fast, and in 2021, there are good reasons why you should file a tax return, even if you did not make very much money last year. If you do not usually file tax returns, you should be sure to file your 2020 taxes so that you do not miss out on a refund. Here's why:
- You may have missed out on 2020 stimulus funds: If you do not usually file (for example, if you are a single adult without children and you do not make much money), you may have missed out on stimulus payments back in 2020! This is because the IRS used past tax records to send out the 2020 stimulus payments that have gone out so far. If you missed out on a stimulus payment because the IRS did not have recent tax records for you, you can claim a "recovery rebate" if you fill out a 2020 tax return. If you missed both of the stimulus payments last year because you were not in the IRS system, you could be eligible for $1800 to $2400 in "recovery rebate" money.
- It will make it easier for you to get 2021 stimulus funds that are coming soon: If the IRS has your address or your direct deposit information that you gave when you filed, it will be easier for you to receive payments you can be eligible for in 2021. Filing as early as possible should help tax refunds come faster, and may speed up your 2021 stimulus payments!
- Even if you did get 2020 stimulus checks, you may not have gotten the right amount. If you file 2020 taxes, you can let the IRS know if in 2020 you had a new baby, had a dependent come to live with you, or lost income due to COVID. All of these changes could mean you did not get as much stimulus money in 2020 as you should have. If you file 2020 taxes, you can get a "recovery rebate" to make sure you get all the money you should have gotten from the stimulus.
- You could be able to get tax credits: If you had low to medium income in 2020, you can get the Earned Income Tax Credit (EITC) whether or not you have children. If your income changed last year, you may be eligible to file for the EITC for the first time. If you do not usually file taxes but you had qualifying earned income in 2020, you can check to see if you earned any money over the last 3 years that you could use to get "retroactive" or back EITC credit. You can also use your 2019 income to claim the EITC credit and the child tax credit if you were eligible in 2019 but not in 2020.