Filing taxes is something that every U.S. citizen has to do, and even those individuals that are incarcerated may end up needing to file taxes at some point. As expected, this process can be confusing and only made worse by the limited resources that you may have while serving time in prison. Our article aims to shed more light on filing taxes after incarceration and the tax resources available to you as you reintegrate into society.
Do You Have to File Taxes While Incarcerated?
Every individual that is working in the U.S. and earns over the minimum income limit (this is $12,950 in 2023) must file an income tax return with the IRS. Most prison systems utilize labor by inmates either to keep the prison running (such as food and laundry services) or as part of an agreement with third-party systems. Work is paid in cents per hour for most inmates, meaning that yearly income typically states under this threshold.
However, if your income while incarcerated is above the minimum filing threshold you will need to file a return with the IRS. Additionally, if you are only incarcerated for a short time, you may need to file for a tax extension as your income will likely be higher than this minimum limit and you will need to file your tax return upon being released.
What You Need to Know About Filing Taxes After Incarceration
Filing taxes is often the last thing that individuals want to think about when it comes to leaving incarceration, but it is an important step to take as you are released back into society. The following tips give you essential information about filing taxes after incarceration.
Tax Credits Might Be Available
Tax credits are often available for many individuals, and these credits help to reduce the total number of taxes that you may owe to the IRS. An example of a tax credit includes the Child Tax Credit. You may need to meet with a tax advisor after being released from incarceration to understand which credits are available to help you with your overall tax burden.
You Can File Previous Year’s Taxes
If you missed filing the previous year’s taxes due to incarceration, you are granted three years from the due date of your last return to file these taxes. This will enable you to settle any tax burdens with the IRS or claim any credits and refunds that are owed to you, helping you to smoothly reintegrate into society with a clean tax slate.
You can find more information about this by accessing the IRS’s Prisoner Re-Entry Program’s resources. These resources are free and provide you guidance as you work to bring your taxes up to date.
You Are Likely Eligible for Free Tax Help
Individuals that meet certain qualifications and are under specific income limit thresholds are often eligible for tax help with IRS programs or with local county and state programs.
Access the information about these resources on the IRS’s website and search county or state government websites to find out if you are eligible for free tax help and tax advice. Be careful not to accidentally put your information into websites that claim to be free but charge you major fees upon trying to file your taxes.
Take your time and reach out to a trusted tax advisor for assistance if you need help understanding the tax filing process or what to do in your specific situation.
Life After Incarceration
Even though incarceration may make it seem like all life has stopped, important items like taxes continue regardless. As you are released from incarceration and go about reintegrating into society, you will need to stay on top of your taxes and ensure you are square with the IRS to stop future problems from occurring.
Don’t hesitate to reach out to a free tax advisor if you need more information about your taxes and the proper filing procedures for your specific situation.
Additionally, after you are incarcerated, you may want to perform a quick criminal records check (like you can find here) to see what information is listed on your record. Staying informed of this will help you as you start to apply for jobs and other opportunities, as you will know what potential employers might see and can be proactive about your criminal record.
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