$1 Billion Available in Unclaimed Tax Refunds

$1 Billion Available in Unclaimed Tax Refunds

Every year the IRS reports around $1 Billion in refunds that are available for individuals who did not file a tax return with half of these refunds are more than $600. Maybe you decided not to file thinking that you don’t itemize and/or your employer is withholding tax so you don’t need to file.

If this is the case, you might want to consider the following reasons to file a return:

  • Over-Withholding – Did your employer withhold more than you owe? If so, then you’ll need to file in order to get the excess back.
  • Earned Income Tax Credit (EITC) – An EITC is a credit for lower-income taxpayers. If you worked and earned less than $52,427 last year, you could receive the EITC as a refund if you qualify with or without a child. The credit can be as much $6,143 and is fully refundable. This is a very lucrative credit, but you have to file to benefit from it.
  • Child Tax Credit – You probably qualify for the Child Tax Credit if you have at least one child under the age of 17. Although this credit is generally non-refundable and can only be used to reduce taxes owed. However, if you work, your income is low to moderate and you don’t use the full credit amount to offset taxes, a portion of the $1,000 per child credit may be refundable.
  • American Opportunity Tax Credit (AOTC) – The AOTC is available for four years of post-secondary education expenses and can result in a credit of up to $2,500 per eligible student enrolled at least half time for at least one academic period during the year. Up to 40% of the credit is refundable, so even if you don’t owe any taxes, you may still qualify for the credit. But to claim the credit you must file a return.
  • Premium Tax Credit (PTC) – If you acquired your health insurance last year through a government marketplace, you probably qualify for an insurance subsidy in the form of the PTC. But you have to file to get the credit. If you received the PTC in advance to reduce your premiums, as did most individuals who used a health insurance marketplace, you must file a tax return and reconcile the advance PTC against the actual PTC.

Keep in mind that the statute of limitations for a refund is 3 years from the un-extended due date of the return, so if you have a refund coming for past years you should file before the statute expires or any refund is gone forever.

Baldwin Accounting has expertise in preparing tax returns for all years, including past years, so please contact this office for assistance so you can get the refunds you are entitled to.

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