It might seem like there has been more news recently regarding unclaimed money. This is not a coincidence at all! The Internal Revenue Service (IRS) recently reported that approximately $1.5 billion in tax refunds are owed to people. However, they will not be able to claim these payments continuously. Instead, people had until April 18th to claim this money. This time has sadly passed.
However, the deadline for taxpayers who requested an extension for their 2018 return is October 17. Many individuals do not understand how to request what they are owed, let alone where these payments come from. We will discuss it in more detail so that you will have a better knowledge of the unclaimed money that you could be able to receive.
How Did We Get This $1.5 Billion?
The amount of unclaimed funds is more than $1 billion. Where does this money come from, though? Well, this money comes from the 1.5 million taxpayers who failed to file a tax return in 2018 (according to the IRS). The three-year window for claiming the money has now passed for most taxpayers.
Furthermore, it is essential to keep in mind that not all taxpayers are subject to this deadline. As a result of Patriots’ Day celebrations in Massachusetts and Maine, residents of those states had until April 19 to submit claims for the money. Patriots’ Day is a yearly celebration of the Concord and Lexington battles. During the American Revolutionary War, these conflicts were among the earliest to take place. Besides some taxpayers having a different deadline of April 19th, others have the deadline of October 17th. That’s only if they filed an extension on their 2018 taxes.
The Standard Deduction
People may associate criminal penalties with unfiled taxes. However, not all Americans are required to submit yearly tax returns, even though the majority of them are. Instead, if an eligible family such as a low-income one makes less than the standard deduction, they normally are not required to submit a return. For instance, the standard deduction for the 2018 tax year was:
- For single filers, $12,000.
- $18,000 for household heads.
- Married, Joint Filers: $24,000.
It is significant to remember that according to the Center on Budget and Policy Priorities (CBPP), 12 million Americans do not submit annual tax returns. It is also crucial to bear in mind that for people who have unclaimed money, this deadline is not a surprise. Over the past two years, the IRS has made an effort to contact those who failed to file. That is because a large portion of the recent stimulus funding is dependent on the taxpayer’s yearly return.
How Much Can You Get?
The amount you receive will differ based on what you are owed. However, you may use the median value as a point of reference. The average amount of these unclaimed tax returns, according to the IRS, is $813! In other words, a person may anticipate that half of the unclaimed refunds will be less than $813 and the other half will be more than $813. This means that you have a 50% probability of receiving a return of more than $813.
Who is Eligible for a Larger Refund?
When it comes to their refund checks, families with low and moderate incomes could be in for a pleasant surprise. That’s because if they file and are eligible for the Earned Income Tax Credit (EITC), they can be entitled to larger refunds. In 2018, the maximum value of the EITC credit, which varies based on how many children you have, was $6,431.
How to Claim a Refund?
You should request your refund if you want to recoup money that is legally yours. Remember–only those who did not file their 2018 taxes are eligible for these funds. This means that you are not eligible to get this money if you submitted your taxes for 2018! It is necessary to file your 2018 taxes before the deadline of April 18 (or April 19 or October 17) to be eligible for a refund.
There are services available to you if you need assistance filing your taxes. For qualifying people, the IRS assists in free tax return preparation. They provide the Tax Counseling for the Elderly (TCE) program and the Volunteer Income Tax Assistance (VITA) program. To individuals who qualify, these programs can offer free basic tax return preparation services.
You must file a paper return with the IRS center mentioned on the final page of the most recent 1040 Form when filing your return. It’s essential to remember that this differs by state. For instance, residents of southern states must send their returns to a separate IRS office than residents of northern ones. Tax returns for 2018 must be done on paper, while those for 2019 through 2021 can be completed online.
A paper filing might result in longer processing times, which is one of its drawbacks. Paper returns must be opened by hand after filing, and the agency may take longer to distribute these kinds of returns. After filing, you must wait to find out how much of a return you are due. The refunds become the property of the United States Treasury Department if a person doesn’t file their return by April 18th (or April 19th/October 17th for those who qualify).
Possible Hold on Your Refund
Even if you submit your 2018 taxes on the due date, things might not be easy just yet. A refund check might not be available immediately. This is due to the IRS’s warning that if 2019 or 2020 taxes are still unfiled, a person may not be eligible for a refund. In addition to the possibility that your return check will be put on hold, you should be aware that any ongoing tax debt you may have may be paid with the money from your refund. It can also be used to pay off other debts such as past-due federal bills and unpaid child support.
Bottom Line
If you have not submitted your 2018 taxes, alarms need to be going off in your head. The reason for this is that you have just a little time left to collect money that is legally yours. According to the IRS, the median amount of these refunds is $813. A person might anticipate having a 50/50 probability of receiving more or less than that number. You must submit your 2018 taxes to get this money. There is support available if you need assistance submitting a return. You might be able to receive assistance from the IRS through free programs like VITA or TCE.