Feature Articles: Taxes
File a tax return even if you don’t have to
Linda Geist, Writer, Extension Communications; Story source: Andrew Zumwalt, Assistant Extension Professor & Associate State Specialist, Personal Financial Planning, University of Missouri Extension
University of Missouri Extension personal finance specialist Andrew Zumwalt gives three reasons why you should file a tax return even if it is not required.
First, you might get a refund of taxes withheld from a paycheck or pension, Zumwalt says. Also, some tax credits generate a refund. Examples include the Earned Income Credit, Additional Child Tax Credit and American Opportunity Credit. You can learn more about these credits at www.irs.gov.
Second, you lower the chance that the IRS will audit you. “If your income is low enough that you do not need to file, then it is extremely unlikely that the IRS would later request that you pay tax,” Zumwalt says. “However, by just filing a simple tax return, the statute of limitation starts to run out, and the extremely unlikely chance that the IRS will request that you pay tax will become a 0 percent chance, unless you committed fraud.”
Finally, you might discover your identity is stolen. If you are not required to file because of a known circumstance such as being unemployed or receiving only Social Security income, identity thieves might use your name and Social Security number to file a fraudulent return.
“I recently had an older client whose return was rejected by the IRS because a return had already been filed for that tax year with her listed as a spouse,” Zumwalt says. “However, her husband had died several years earlier. Thieves had guessed that she would not file a return and filed a fraudulent return listing her as a spouse.”
He helped her prepare a Form 14039: Identity Theft Affidavit to alert the IRS to the fraud. The IRS issues Identity Protection PINs to taxpayers who have been victims of identity theft. This provides greater security by requiring another layer of authentication when the return is processed.
This story was originally published by MU Extension news: http://extension.missouri.edu/n/2729
Last update: Monday, February 20, 2017