There is no better feeling than dropping your tax return in the mailbox or hitting the return key to submit them electronically. That’s because you know that are not only free to put all matters relating to taxes aside for an entire year, but also because you may be on your way to collecting a potentially sizeable refund.
Interestingly enough, the Internal Revenue Service recently issued a reminder to taxpayers that the deadline to collect refunds from a prior tax year is rapidly approaching and that those who fail to take action could really be missing out.
What’s the prior tax year and how much in refunds has gone unclaimed?
Under federal law, taxpayers are provided with a three-year window to file a tax return to secure a refund from the IRS. Accordingly, the deadline — April 18, 2015 — is soon approaching for filing 2012 federal tax returns.
As to the amount of refunds that have gone unclaimed from tax year 2012, the IRS is putting the total at around $950 million.
Wouldn’t I get in trouble for filing a late tax return?
The IRS does not penalize people for filing a late tax return if they’re owed a refund. Indeed, the agency indicates that the people most likely to fall into this category are students and lower-income earners who might have mistakenly believed that they wouldn’t have secured any sort of refund.
Is it worth the effort?
The IRS has indicated that the national median for these remaining 2012 tax refunds is $718. Here in Georgia, where an estimated 34,300 people have money waiting, the median is $642.
Are there any strings attached?
In order to claim the 2012 tax refund money, a person must have filed tax returns for 2013 and 2014. Furthermore, if they owe any outstanding money to the IRS or state tax department the amount will be deducted from the refund. The same goes for child support arrears or other federal debt.
What happens to the 2012 refund money that isn’t claimed?
As you might imagine, any unclaimed money will be retained by the federal government.
If you have questions or concerns regarding any tax-related matter, please consider speaking with an experienced legal professional.