The EITC Not Always Claimed for Taxes

You would have been given a refund had you filed your 2011 tax return, but you never did. The IRS is holding onto $1 billion in unclaimed funds that will become the property of the federal government if tax filers don’t claim the funds before the end of the tax filing period. Over 1 million houses failed to file and are owed the money.

Tax payers have three years to file a return and claim funds that they are owed. The people that do not normally file when owed tax refunds are part-time workers or students who do not make much money and therefore feel they will not be getting a refund. But they pay more into the system than is required and therefore would have gotten a refund had they filed.

Earned income tax credit
Earned income tax credit (Photo credit: Wikipedia)

The Earned Income Tax Credit (EITC) is one big area of refunds that are not filed. These are refundable tax credits and therefore are given to filers that have not paid much into the system but have earned some income. In 2011 the EITC was as high as $5,700 if your family size was large enough. There have been stories about illegal immigrants gaining the right to file 3 years of returns to obtain three years of EITC. Those numbers are not yet included in this report by the IRS.

Tax Carnival Ecstasy – February 15, 2014

Welcome to the February 15, 2014 edition of Tax Carnival Ecstasy. In this edition we start with an article from Bill Smith on taxes and retirement. And Kurt from MyMoneyCounselor.com presents an article on the Alternative Minimum Tax for 2013? Hope you enjoy all the articles, bookmark this carnival, share, tweet, and come back soon.

retirement

Bill Smith presents You Need To Know A Lot About Retirement posted at FastSwings, saying, “2014 Taxes are here causing many people to worry a lot about retirement. If you are among these people, i.e. you feel you are far behind in your retirement or haven’t started saving for it at all, this tax article will give you some advice on readying yourself for this imminent event.”

English: President Barack Obama's signature on...
English: President Barack Obama’s signature on the health insurance reform bill at the White House, March 23, 2010. The President signed the bill with 22 different pens. (Photo credit: Wikipedia)

taxes

Bill Smith presents TurboTax Makes the Most of Superbowl Time! posted at 2012 Tax – Free Tax Filing Options, saying, “There is nothing better this time of year than watching the Superbowl especially if your team made it.”

Bill Smith presents Healthcare & Intuit TurboTax posted at 2010 Taxes to 2013 Taxes, saying, “To know the ropes of TurboTax Health care and understand the highlighters of Affordable Care Act, turn your glances towards Intuit Inc. to get apprised of the facts.”

Bill Smith presents TurboTax And The Earned Income Tax Credit posted at 2013 Taxes, saying, “Individuals who wish to use a tax service may wish to try TurboTax 2013. This is the option that they may need to easily pay their taxes, and be able to get the tax help they can use.”

Bill Smith presents H&R Block Deluxe and TurboTax Deluxe posted at 2014 Taxes, saying, “H&R Block Deluxe and TurboTax Deluxe are all online tax software that offers tax solutions.”

[email protected] presents Will the Alternative Minimum Tax Zap You for 2013? posted at Money Counselor, saying, “Americans’ elected representatives have created a semi-secret weapon to help assure you pay what they deem is your fair share: the Alternative Minimum Tax.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Should I File A Tax Return This Year?

The law requires you to complete a tax return when you have income above a designated amount.  The amount varies according to your age, filing status and income type.  However, even if you are not required to file, you might benefit as you could get a refund if taxes were withheld or you qualify of certain refundable credits.

The IRS website is a helpful resource to see if you should file.  The Interactive Tax Assistant on the site can lead you through a several questions to see if you should file.  Other information is found on printed tax forms.

Six reasons to file a Federal Income Tax Return in 2011 even though you are not required:

Taxes withheld – If any employer withheld taxes, you paid in estimated taxes or had a refund from a previous year credited to this year’s taxes, file for a refund.

EITC – EITC is for those who worked but had limited income.  This credit means you might get a refund even if you did not pay any taxes.  You must complete the return claiming the credit to qualify.

ACTC – A refundable tax credit for those with one or more children who qualifies that did not get the total amount of the  Credit for Child Tax .

AOCS – During the first 4 years of education past high school qualify for this credit of up to $2,500.  Even if there is no tax due 40% of the money ($1000) can be refunded to the filer.

Adoption Credit – This credit is available for expenses paid in adopting a child.

HCTC – This credit is available to some individuals receiving assistance in the back to work programs that were established as a part of economic recovery and those receiving pension benefits from a Pension Benefit Guaranty Corp. for tax year 2011.  Eligible individual can include a large portion of the payments for health insurance they made when they file a tax return this year.