Which action should a taxpayer take if they had federal income tax withheld and are eligible for refundable credits?

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Multiple Choice

Which action should a taxpayer take if they had federal income tax withheld and are eligible for refundable credits?

Refundable credits can reduce your tax liability to zero and still leave you with a cash refund. When tax is withheld from your pay, that amount has already been paid toward your tax. To get any refund from that withholding or from refundable credits, you must file a tax return. The return reports your income, the amount withheld, and the credits you qualify for, and the IRS uses that information to determine exactly what refund you’re owed. If you’re eligible for refundable credits, filing is the way to claim the refund and receive any withheld amounts. Refunds aren’t issued automatically without a filing showing you’re due one, and there isn’t a valid reason to refrain from filing just because a service isn’t required.

Refundable credits can reduce your tax liability to zero and still leave you with a cash refund. When tax is withheld from your pay, that amount has already been paid toward your tax. To get any refund from that withholding or from refundable credits, you must file a tax return. The return reports your income, the amount withheld, and the credits you qualify for, and the IRS uses that information to determine exactly what refund you’re owed. If you’re eligible for refundable credits, filing is the way to claim the refund and receive any withheld amounts. Refunds aren’t issued automatically without a filing showing you’re due one, and there isn’t a valid reason to refrain from filing just because a service isn’t required.

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