Published on April 6, 2021 in Financial Empowerment
Wondering if it’s worth it to file your taxes? The answer is yes — no matter what. And we have resources to help you do it.
Tax time can be confusing — and this year, there are a lot of changes to the tax code. Many of these changes — like waiving taxes on a portion of unemployment income and allowing you to use your 2019 income for your Earned Income Tax Credit — could mean that you have more money coming to you than you expect. But you can’t get your refund if you don’t file.
Below, we break down the myths and facts of the 2021 tax season.
If you live in Wayne, Oakland or Macomb county and made $57,000 or less in 2020, you can register for a free virtual tax preparation appointment. Appointments are available through Accounting Aid Society and Wayne Metropolitan Community Action Agency and registration is hosted by the City of Detroit. You do not have to be a Detroit resident to use their registration tool.
Additionally, United Way’s MyFreeTaxes offers an online tool for free do-it-yourself tax prep.FILE FOR FREE NOW MAKE AN APPOINTMENT
If I was out of work in 2020, there’s no reason to file my taxes.
You should file for your 2020 tax return — no matter what.
A special COVID-19 exception allows you to claim the Earned Income Tax Credit based on your 2019 earned income or your 2020 income — whichever gives you the highest refund. Even people who were out of work in 2020 can still receive a hefty refund. But you have to file your taxes to do it.
I don’t make enough money to bother filing taxes.
The federal government is increasingly using tax records to distribute COVID-19 relief payments and other new benefits.
Don’t miss out! If you didn’t receive your COVID-relief Economic Impact payments from the IRS last year, you can still claim your payment through the Recovery Rebate Credit by filing your taxes. When you file your taxes, you will automatically receive the new expanded Child Tax Credit and any new stimulus payments, if you are eligible. If you don’t file your taxes, you may have to take extra steps to receive the money you are entitled to, your payment may be delayed, or you may miss out entirely.
It’s too late to file taxes — I missed the deadline.
This year, the tax deadline is extended to May 17 — and even if you miss the deadline, you can still file late, and you should.
If you don’t owe taxes, there is no penalty for filing late. You can still file at any time to claim your refund. If you do owe taxes, you can still file after the deadline, and it’s still best to file as soon as possible. Filing as soon as possible minimizes the interest and penalties if you owe taxes.
I’m going to owe and can’t afford to pay my taxes, so it’s better not to file.
You won’t know whether and how much you owe until you actually file.
It’s possible you might get a pleasant surprise and have a refund instead! If you do owe, it’s better to file on time and set up a payment plan with the IRS rather than file late or not at all. The IRS will find you eventually, and the longer you’ve gone without filing, the more you may owe in penalties and fees.
Now that you have the facts, it’s time to file. United Way and our partners offer two trusted, safe ways to file for free.
For everyone: Visit UnitedWaySEM.org/taxes to file online yourself using MyFreeTaxes — free guided online software. A helpline is available daily from 10 a.m.-10 p.m. for questions about using the software.
For Wayne, Oakland and Macomb families that made up to $57,000 in 2020: Visit the City of Detroit’s appointment scheduler or call United Way’s 2-1-1 helpline to schedule an appointment for free, IRS-certified tax preparation services. All appointments are entirely virtual or COVID-safe document drop-off.
Accounting Aid Society, the City of Detroit, United Way for Southeastern Michigan and Wayne Metropolitan Community Action Agency proudly partner to expand access to free tax preparation options for residents of Detroit and Wayne, Oakland and Macomb counties.