February 2, 2021
Note: Netspend is not a tax advisor or CPA. The knowledge in this post is general information and should not replace the advice of a tax professional. For more information, please reach out to a tax professional in your area.
The IRS offers online tools to help you determine whether or not its required that you file a federal tax return. These results do not constitute written advice, the answers are based on the information you provide. If you have questions about preparing your taxes it’s best to consult a tax professional.
Here’s more on why it’s a good idea for low earners to file a tax return, including a list of potential tax deductions available for those who do.
Reasons to file a tax return
Not sure how taking the time to fill out a return benefits you? Use the IRS tax tool to see if you are required to file.
While the tax filing process may be daunting, just consider some of these advantages for filing:
- Tax filings may be used for future assistance programs. Did you know the Coronavirus Aid, Relief, and Economic Security (CARES) Actused prior years’ returns to calculate stimulus check amounts? Those who don’t file could be at a disadvantage for new programs and additional stimulus payments. Some social service programs also use tax statements as a way to help you file for Medicaid, disability, or food assistance.
- You may have overpayments to claim. When you fill out a W-4 with your employer every year, it tells your workplace what deductions to consider. You may or may not have deducted more than was required.
- Your state may require it.Not every state has income taxes, but those that do may require you to fill out the forms, regardless of your income. Some state benefit programs rely on these same tax returns as well — for things like scholarship programs and financial aid for college.
Why filing a tax return makes sense
Even if you made just a few dollars this year, your work could be rewarded with low-income earners’ tax rebate options. Find a tax professional in your area who can help you determine which rebates you might be eligible for.
It’s also important to remember that lawmakers can make changes to tax laws. Since it’s almost impossible to keep up with all the changes, taking time to work with a tax professional might be a good idea.
What should you do when you get your refund? Whether you save toward a goal, spend it on something nice for yourself, or pay down debt, Netspend can fit into your financial plans with flexible options for making payments on common purchases and special occasions alike.