Taxpayers think of tax refund as a lucky bonus. The federal government or the state government repays the taxpayer if he/she paid an excess amount. If you overpaid your taxes last year, you can be eligible to get back the tax refund due to various reasons. The taxpayer receives the refund via personal checks, US saving bonds or direct bank deposit, which can take a few weeks or much longer, depending on the specific claims made by the taxpayer.
Tax refunds feel great and are always welcome; however, the better idea is to avoid paying taxes in excess to the government. On the other hand, some people look at it as an alternative savings plan. There are circumstances which may lead to an overpayment of taxes to the state or federal government. Consider the example of an individual who lost employment in the year and was unable to find a new job immediately. In this case, he/she might have eligibility for a comprehensive refund.
The child tax credit, the earned income tax credit (EITC) and the American opportunity tax credit fall under the refundable category of credits, some of which are only partially refundable.
The child tax credit for year 2020 was a maximum of $2,000, of which $1,400 was refundable. In 2021, the maximum credit was increased to $3,000 for children aged between 6 and 17 years. Previously, this credit was partially refundable, but now the credit can be refunded in full. If you are a moderate or low-income worker, you can avail yourself of the earned income tax credit benefit. To become eligible for it, you will need to fulfill a specific set of criteria.
For more details on refundable tax credits and the eligibility criteria for the same, feel free to get in touch with SCL Tax Services. Our tax professionals will address all your questions and concerns in this regard.
Also, the IRS have tools for tracking a refund if you are interested:
If you overpaid your taxes during the year, you can expect to receive a refund. In order to receive the payment, a proper tax return will need to be filed. Tax refund is your own money and you must be prepared to get back the money that the state or the federal government owes you.
At SCL Tax Services, our expert team helps you receive the maximum amount of tax refund, and to get a bigger one, the best piece of advice is to keep yourself more organized. This means you should keep track of all your transactions, receipts and documents during the course of the tax year. Some of the key documents that you should properly keep on file include charitable contribution receipts, property tax forms, student loan interest papers and other essential documents that relate to your financial life and situation. Your tax planning should begin as early as possible if you plan to receive the largest refund.
If you have a complex tax situation or you are going to file your tax returns for the first time, you should definitely seek the help of a professional tax preparer. Our expert team has represented hundreds of taxpayers before the IRS and helped them get the biggest refund.
Give our tax firm a phone call to schedule your free consultation and find out how we can assist you.