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The deadline is fast approaching to get your share of over $1 billion in unclaimed tax refunds. More than 1.1 million people have yet to claim their 2021 tax refunds, the IRS says — and the last day to do so is April 15.
Deadline looms to claim tax refund
Taxpayers generally have three years from the deadline for submitting their tax return to claim their tax refund. Tax returns for the 2021 tax year were due April 15, 2022.
That means the final countdown is on for taxpayers to collect their money. The only way to do that? File your 2021 tax return by April 15. If you miss the deadline, your tax refund becomes the property of the U.S. government.
The median tax refund for the 2021 tax year is $781, according to IRS estimates. That means half of the unclaimed tax refunds are worth more than that, and half are worth less. But some states have higher medians: The median 2021 tax refund for taxpayers in New York and Pennsylvania is $990. See this IRS page for the complete list of median 2021 tax refunds by state.
Some taxpayers may be owed more than the above amounts: The more than $1 billion in unclaimed tax refunds is based on money that was overpaid by taxpayers to the IRS (such as through over-withholding from paychecks) — that dollar amount doesn’t include unclaimed tax credits people may be entitled to.
Same deadline for recovery rebate credit
One such credit for tax year 2021 is the recovery rebate credit. The federal government issued economic impact payments, also known as stimulus payments, in 2020 and 2021 to provide financial relief during the height of the COVID-19 pandemic.
Taxpayers who didn’t receive a direct payment or only received a partial amount generally were eligible for the recovery rebate credit — but they had file a tax return to claim the credit.
Currently, the IRS is automatically sending out recovery rebate credits worth up to $1,400 per taxpayer (plus each qualified dependent) to people who filed a 2021 tax return but failed to claim the credit. (This is separate from and not counted in the more than $1 billion of unclaimed tax refunds.)
If you didn’t file a 2021 tax return, you have until April 15 to do so to receive your recovery rebate credit, as well as any other tax credits and overpaid taxes.
How to claim your 2021 tax refund
If you didn’t file a 2021 tax return, the only way to claim any money due you — whether it’s money you overpaid through tax withholding or tax credits you may be eligible for, such as the earned income tax credit or the recovery rebate credit — is to file your 2021 tax return by April 15.
Keep in mind:
A taxpayer with qualifying children could claim up to $6,728 as part of the earned income tax credit in 2021.
If the thought of filing a tax return now based on your financial situation in 2021 is overwhelming, keep in mind there are some easy steps you can take to meet the upcoming deadline.
Create an IRS online account
An IRS online account is a quick and easy way to see your tax records and some tax documents.
If the documents you need to file your 2021 return aren’t in your IRS online account, you may need to reach out to your employer, bank or other financial institutions for copies of your 2021 tax documents. See this IRS page for information on filing a past-due tax return.
Review your prior year’s tax returns
Look at other tax returns, such as your 2020 tax return, to get an idea of what income and tax write-offs you claimed previously. This way, you can ensure you don’t miss any tax deduction or credit to which you’re entitled.
Gather business bank and credit statements
If you were self-employed during 2021 and paid business expenses using your bank or credit accounts, you should obtain copies of your statements. You can review each statement to identify any deductible business expenses you can claim on your tax return. Along with identifying deductions, you can also get an idea of places you’ve traveled, which may also be considered tax write-offs.
Tax refunds and tax debt
Taxpayers who owe money to the IRS or another governmental agency — for debts such as back taxes, child support or student loans — may have their tax refund applied to that unpaid debt.
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