IRS Looking to Handout Over 1.3 Billion Dollars

Why you should usually file a return even when you aren't required to do so

The IRS reports that it has over $1.3 billion in unclaimed refunds for tax year 2006 alone! These refunds are owed to nearly 1.4 million people who neglected to file a 2006 tax return. The IRS estimates that the median unclaimed refund for tax-year 2006 is $604.

Many taxpayers neglect to file a return because they didn’t earn enough income to require filing a tax return, even though they had taxes withheld from their income. There are many benefits to filing a return even when you are not required to do so. Here are some of those benefits.

According to the IRS, many taxpayers who filed a return are eligible for a larger refund because:

…many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). The EITC helps individuals and families whose incomes are below certain thresholds, which in 2006 were $38,348 for those with two or more children, $34,001 for people with one child and $14,120 for those with no children. For more information, visit the EITC Home Page.

In order to request a copy of your return from the IRS, follow these instructions.

The IRS allows a taxpayer to file a tax return up to three years from the due date of the return to file. So, the nearly 1.4 million people who are due a refund from their 2006 taxes have until Thursday, April 15, 2010 to file their 2006 return. Since, in these cases, no money is due to the IRS, there will be no penalty to someone who files a late return.

There are a few things that you must know before filing a return for tax year 2006:

You will not be able to file an electronic return, although you will be able to request direct deposit
If you did not file a tax return for 2007 or 2008, your 2006 return will not be released to you
Your 2006 refund will be used to satisfy any outstanding debts owed to the IRS, unpaid child support, and any delinquent federal student loans
You will lose the right to claim the Telephone Excise Tax Refund

Whatever money is not claimed by April 15th will become the permanent property of the US Treasury Department.

Please be sure to file a return for tax year 2009 in order to avoid losing out on your potential refund – especially considering the Making Work Pay Tax Credit.

For more information on taxes click here.

______________________________________________________________________________

Enter your email address to receive updates from KNS Financial:

Or, to subscribe to our RSS Feed click here.

Related Websites

My Last Income Tax Update (hopefully) I have given the readers of this blog an insight into my taxes, so I...
Annuity Income Taxation As more baby boomers consider fixed annuities to protect retirement income, the issue of taxation...
The Very Best Money Saving Tips Always trying to save money but somehow you always end up spending more than you...
How to Get Help Preparing & Filing Your 2010 Income Taxes - for Free! The process of filing annual income taxes is overwhelming enough without having to worry about...
10 Ways To File Your Taxes That Will Tick Off The IRS This is a guest post by Chris Bennett of Creditloan.com. And yes, I know the...