Every year, many people fail to file their income tax returns. Many times it is because their income was low enough that they didn’t need to file. However, they may be missing out on some serious cash. Here’s why. Even though they weren’t required to file, they still had income tax withheld from their checks and are due a refund.
RumboughThe IRS recently said that there are around 1 million people who haven’t filed their 2008 tax returns and are due refunds totaling $1 billion. Half of those people are due more than $600 each. More than $10 million in unclaimed refunds are due to 12,200 South Carolinians, with an average refund of $547. If you are one of those people, it’s time to get busy and file, because you have just a short time to claim your cash. The last day to file your 2008 return is April 17. After that date, the money will become the property of the U.S. Treasury.
In addition to unclaimed refunds, many people need to file because they may be missing out on some tax credits. For example, if you didn’t receive an economic stimulus payment in 2008, you may have been eligible for the Recovery Rebate Credit of up to $600 per taxpayer. Also, if your income is low enough, you may also qualify for the Earned Income Tax Credit. This credit is a refundable credit, which means it is not limited to your tax liability. So, in essence, you may get back more than what you paid in.
Be aware, though, that you may not be able to claim your 2008 refund if you haven’t filed your 2009 and 2010 income tax returns. Also, if you owe money to the IRS, the 2008 refund will be applied to that amount. So, get busy and file those returns. Need help doing this? Contact your CPA or other tax preparer for assistance. Your refund may be a lot more than the tax preparation fee.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.