Did you know that the IRS reports billions of dollars in unclaimed tax refunds each year? Yes, a billion dollars is owed to taxpayers across the country who failed to file their 2018 tax returns. What caused this to happen?
Most tax refunds go unclaimed because taxpayers who do not meet the IRS income threshold requirement to file a tax return are entitled to a tax refund but cannot claim it because they never file a return.
The Earned Income Tax Credit, or EITC, is another portion of unclaimed tax refunds that the IRS may be holding onto. This is a tax credit, not a deduction, that is available to many lower and middle-income workers, and it is frequently unclaimed. In 2018, the maximum EITC credit was worth up to $6,431.
If this describes you, it's time to get to work so you can take back
what is rightfully yours. One thing to keep in mind is that the IRS only allows you to claim past refunds for three years. The deadline for claiming tax year 2018 refunds (the tax return you would have typically filed in 2019) is April 18, 2022. After that period of time has passed, the funds are transferred to the United States Treasury. You should also keep in mind that if you want to claim a refund from two or three years ago, you'll almost certainly need to ensure that all subsequent year tax returns have been filed in order for the funds to be released. If you haven't already filed your 2018 tax return, you should do so right away to be eligible for this refund.
If you want to claim a potential refund that is several years old, you will need to gather documentation that records your income and taxes paid throughout the year, as well as deductible expenses. Creating W-2 and 1099 forms a few years ago may have taken some time. This is why it's critical to keep all tax-related documents for at least 3-7 years.
If you can't find the documents you need to file your 2018 taxes, you should contact your employer or payer at the time and request copies of the forms. If these efforts fail, you can obtain a free transcript from the IRS containing information from these year-end documents by ordering a free wage and income transcript at IRS.gov using the Get Transcript Online tool or by submitting Form 4506-T to request a wage or income statement.
Remember that the IRS estimates that the average refund in 2018 will be $2,910.
So, consider your situation and decide whether doing some legwork to locate documentation and file old tax returns is worthwhile. You may be eligible for a refund for previous years.
Also, don't forget about your tax refund for the current tax year. Tax refund can assist you in filing your taxes for the current tax year as well as previous tax years. Cheap accountant in London will ask you simple questions about yourself and then calculate the tax deductions and credits you qualify for based on your answers.
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