The Internal Revenue Service reported that it had unclaimed tax refunds totaling about $1.5 billion — and the tax agency is pushing citizens to claim any money that is owed to them before April 18.
The unclaimed refunds are the result of almost 1.5 million taxpayers who did not submit a tax return in 2018, according to the IRS.
Because the refunds must be claimed within three years of the date of the tax return, the window for most taxpayers to get their money will close on April 18, which is the federal tax filing deadline for this year.
Due to the Patriots’ Day holidays observed in both Maine and Massachusetts, people in those states have until April 19, 2022, to claim their refunds.
According to the IRS, the median value of unclaimed tax refunds is $813 — which means that half of all unclaimed refunds will be less than $813 and a half will be more than that amount, on average.
Despite the fact that the vast majority of Americans submit annual tax returns, there are some individuals who are not obligated to do so.
Most of these are low-income households – for example, individuals who earn less than the standard deduction are normally exempt from filing a tax return.
According to the IRS, the standard deduction for single taxpayers is $12,550 and for married couples, it is $25,100 for the tax year 2021.
According to the Center on Budget and Policy Priorities, an estimated 12 million Americans do not submit annual tax returns, a figure that has been questioned.
Due to the fact that many of the federal government’s stimulus programs — from stimulus checks to the advanced Child Tax Credit payments — were reliant on a taxpayer’s annual return,
the IRS has made an attempt to reach out to those who do not file their tax returns in the past two years.
If the money is not claimed by April 18, it will revert to the control of the United States Treasury Department.
How to make a claim for a refund
For starters, the refunds are only available to persons who did not file a tax return in 2018 — meaning that taxpayers who have already filed their returns for the 2018 tax year are not eligible for the unclaimed refunds.
The first thing you should know about obtaining a refund is that you will be required to file a tax return for the year in question.
According to IRS Commissioner Chuck Rettig, “We want to assist taxpayers in receiving their refunds, but they must complete a 2018 tax return before this key deadline.”
In order to file a paper return with the IRS, you’ll need to go to one of the IRS centers indicated on the final page of the current Form 1040.
As a result, taxpayers in Alabama, Georgia, and numerous other Southern states should send their returns to an IRS office in Kansas City, Missouri, according to the organization.
According to the IRS, only tax forms for calendar years 2019 and after can be electronically filed.
The obligation to file on paper may have a negative impact, as the IRS has said that filing on paper may result in processing time being prolonged.
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Because these returns must be opened by hand, it takes extra time for the agency to process and distribute paper return forms.
This year, the IRS is asking taxpayers to file their 2021 taxes electronically in order to ensure that their returns are processed as quickly as possible.
It is possible that refunds will be withheld.
Lastly, the Internal Revenue Service warns that customers who have unclaimed refunds from 2018 may have their checks held if they haven’t filed their tax forms for 2019 and 2020 by April 15.
The refund will also be applied to any amounts that the taxpayer still owes to a state tax agency or the IRS — and it may even be used for delinquent child support payments or past due federal debts, such as student loan debts.
According to the Internal Revenue Service, low- and moderate-income households that file and qualify for the Earned Income Tax Credit may be eligible for larger refunds.
According to the agency, such credit was valued at up to $6,431 in 2018. Family size, as well as the family’s filing status, are factors in determining eligibility for this tax credit, also known as the Earned Income Tax Credit (EITC).
When it comes to married couples filing jointly with three or more children, the EITC is available to those who earn less than $54,800 a year, according to the IRS.
Single taxpayers with three or more children, on the other hand, have a lower income threshold of around $49,100.