What is the impact of filing a tax return even if not legally required?

Filing a tax return when not legally required can indeed lead to potential financial benefits, such as a refund. Individuals may have valid reasons to file a return despite not being mandated to do so, such as having excess withholding or refundable tax credits, like the Earned Income Tax Credit or the Child Tax Credit. If taxes were withheld from their paychecks throughout the year, or if they qualify for specific credits, they may be eligible to receive a refund even though their income does not require them to file.

This action of voluntarily filing could also help in establishing a record of earnings and taxes paid, which can be beneficial for various financial transactions in the future. Such a record could enhance one's credibility when applying for loans or mortgages, as it provides an official documentation of income.

The other options do not accurately align with the benefits of voluntarily filing a tax return. While the fear of penalties could deter some from filing when not required, it is not the case if the return is filed correctly and no taxes are owed. Additionally, filing does not necessarily prevent future audits, nor is it irrelevant to tax obligations, as filing creates a formal record that the IRS may reference in their activities. Thus, the decision to file can have positive outcomes that justify the effort,