Every year, people who are required to file tax returns or who could benefit from filing a return fail to do so. Some of them miss their chance to receive a tax refund, while others could run into tax penalties, interest and other problems caused by unpaid IRS tax debt.
Here are some of the common reasons that people forget or fail to file their tax returns.
Don’t Understand Tax Laws
Most laws require citizens to abstain from illegal conduct. However, tax laws are different in that they require you to actively do something in order to comply with the law.
Some people don’t understand that it is their legal duty to pay taxes and file a return every year. This could be caused by ignorance, but it can also be the result of believing in frivolous tax arguments.
The IRS does not appreciate frivolous tax arguments and will not consider them a legitimate excuse for failing to meet your tax obligations.
Don’t Understand Filing Requirements
The basic filing requirement for 2018 and beyond is that you need to file a return if your income is over the standard deduction amount. For 2018, the standard deduction was $12,000 for single taxpayers and twice that amount for married taxpayers who file jointly.
However, there are many other lesser-known filing requirements. If your net employment income is at least $400, you need to file, even if your total income was under the standard deduction amount. You also need to file a return if you received premium tax credits for health insurance you received from the Healthcare.gov Marketplace.
If you are unsure if you have a filing requirement, talk to a tax preparer to make sure.
Don’t Know They Are Owed a Refund
Even if you don’t have a filing requirement, you still need to file a tax return to get your tax refund. If your employer has been withholding federal income taxes from your paychecks, you might be able to get some or all of that money back, but you need to file.
You could also get an even bigger tax refund if you qualify for the Earned Income Credit or another refundable tax credit. You only have three years to file your return before you lose your right to claim your tax refund.
If you have tax problems caused by unfiled tax returns, contact a tax attorney to discuss your options for getting your returns filed and resolving your tax issues.
Get help with unfiled tax returns by calling The Gartzman Law Firm at (770) 939-7710. We can listen to your concerns and help you find the best tax resolution strategy for your case.