Unclaimed refund lying with IRS. Here is how to get your unclaimed refund?

Unclaimed refund lying with IRS. Here is how to get your unclaimed refund?

Unclaimed refund lying with IRS. Here is how to get your unclaimed refund?

Since 2016, there is more than $1.5 billion as outstanding refunds with the IRS which remains unclaimed.  This implies there might have been more than around one million taxpayers who may be qualifying to obtain tax refunds but did not file their income tax return.

In case, you are due for a tax refund you must file a federal income tax return to obtain your money.

A three-year window

According to the IRS, you have a window of three years within which you can file your tax return and would be able to claim any tax refund which is due. This window of three years begins on the original date when your return was due or the extended due date in case if you had filed for an extension. For the current year, this due date is 15th July 2020 or it is 15th October 2020 if an extension was filed by you.

In case, you miss out on this three-year window you would not be able to get back the money. The money will then belong to the US Treasury and you would have no right to claim the money anymore.

Why you might be having a refund due?

  • If in 2016, you were filing your federal tax return as a single taxpayer who was below the age of 65 years and had an income less than $6300 then you didn’t need to file the tax returns. You can consider that income tax has been deducted by your employer throughout the year and the IRS owes to return you that. Since you were not needed to file the federal tax return you had not filed which would have been of great interest to you.
  • Your income level in 2016 might be eligible to obtain a tax credit which can only be availed by filing a tax return. Due to your low or moderate-income level for the year 2016, it would be feasible that you might be eligible to obtain the EITC (Earned Income Tax Credit).

Below-mentioned are the income thresholds for 2016 and if your income for 2016 was below these limits, you would be eligible to obtain ETIC and can be done by filing tax returns by the 15th of July 2020. 

  1. For single individuals and having three or more qualifying children-$47955 whereas it is $53,505 for a married couple and filing the tax return jointly.
  2. For single individuals who are having two or more qualifying children-$44648 whereas it is $50,198 for a married couple and filing the tax return jointly. 
  3. For single individuals who are having one or more qualifying children-$39,296 whereas it is $44,846 for a married couple who are filing the tax return jointly.
  4. For single individuals having no qualifying children-$14,880 whereas it is $20,430 for a married couple who are filing the tax return jointly.
  • There are some other tax credits as well which you might be qualifying to claim for 2016 such as Adoption credit, Additional child tax credit, health coverage tax credit, American opportunity credit, etc.
  • You would be able to obtain tax credits and other tax breaks only when you file your federal income tax return. No penalty is charged for failing to file the tax return when you already have a penalty due. 

How will you get back your refund?

To get back your refund, you will need the forms W-2, 1098, 1099 or Form 5498 from the year 2016. In case, you do not have these old forms you can place requests for copies of these forms with your employer, bank, or other payers. You can also the IRS tool i.e. Get Transcript Online tool on the website of the IRS where you would be able to obtain your free wage and income transcript. You might need a copy of the Form 1040, Form 1040A or Form 1040EZ from the year 2016. You can easily obtain these forms and necessary instructions on the IRS.gov Forms and Publications page.

If you have money to be paid back for student loans, any back taxes, or child support then the refund amount would be offset for the tax amount you owe to pay. Moreover, if you have not filed your tax returns for the year 2017 or 2018 then it is quite probable that the IRS would hold back your tax refund.

Conclusion

Hence, this is your chance to claim your refunds back and you should not miss this opportunity failing which the money would belong to the IRS forever.

Top #10 things to keep in mind to avoid falling prey to tax scams

Top #10 things to keep in mind to avoid falling prey to tax scams

Top #10 things to keep in mind to avoid falling prey to tax scams

Tax scams are common happening throughout the year. However, with distressful times caused all around by the novel coronavirus tax scammers are finding this as an ideal time for catching up new prey. Usually, it is seen that young Americans are most likely to fall prey to the tax fraudsters and scammers.

The IRS has been continuously creating awareness amongst the Americans against the increased tax scams, frauds, and cons. The IRS has informed the common people about the various in which tax scams can occur may it be in the form of abusive tax schemes, telephone scams, or even in the form of phishing schemes. The IRS urges the Americans to be alert and prevent being a victim to any scams or any such schemes which might be offering instant money or exemption from filing tax returns or paying taxes as the citizen of the United States. Any such schemes or offers can land up common people into big troubles like prosecution and imprisonment as well.

Let us have look at the most important things which need to be kept in mind by the Americans to avoid falling prey to tax scams.

a.Abusive or fraudulent tax preparers

The majority of the tax preparers are quite honest and do the tax preparation legitimately, but some can be fraudulent. Fraudulent tax preparers can file returns by the use of false information to boost the refund. Some taxpayers might even attempt to steal personal information that is present in your tax documents. Taxpayers must be very careful while selecting their tax preparers and must remember that the ultimate responsibility for information used in a tax return is theirs.

b.Telephone scams

This can happen when criminals pose to be IRS agents and call the taxpayers to threaten for paying overdue tax bills. These imposters use fake names and phony IRS identification badge numbers. Taxpayers should always remember that the IRS would never adopt threatening as a strategy to deal with common people. Moreover, the IRS would also never call up taxpayers for immediate payment using a debit card or any other medium. It would usually send you mail in case of any payment due or any other issues. 

c.Tax identity thefts

Tax identity thefts occur when a tax fraudster tend to use taxpayer’s information and obtain income tax returns from the IRS. This might occur even before income tax returns have been filed by the taxpayers. Fraudsters can steal taxpayer’s Social Security number and file returns early in the season. Usually, fraudsters try to use this strategy for deceased persons to obtain the benefits.

 

d.Phishing 

Phishing occurs by unsolicited emails or websites posing as legitimate sites that can lure the victims to share their personal and financial information. The intent of the fraudsters here is not to use the taxpayer’s information only for tax-related scams but also to store the information for use in other frauds in the future. 

 

e.Security of Social Security Number

A taxpayer can lose his Social Security number easily and the entire fraud procedure begins when the Social Security Number is available. Taxpayers should avoid carrying Social Security Number outside and must also ensure that their smartphones are locked to avoid Social Security Number theft.

f.Early filing of tax returns

The taxpayers should file their tax returns at the earliest so that they can beat the criminals. Usually, fraudsters aim at filing the tax returns by using the stolen information at the earliest and even obtain the returns before the IRS is aware of it. However, taxpayers can rule out this possibility by filing their tax returns as soon as possible.

g.Choose bona fide tax preparers

Taxpayers must always opt to work with a reputed company and trustworthy tax preparers. Qualified tax preparers would have Tax Preparer Identification Number and taxpayers can check on this from the IRS website. Moreover, taxpayers can check the reviews of the tax preparation companies before deciding to work with them.

 h.Alert about data breaches

Data breaches help the fraudsters in obtaining the information which is needed to execute the tax identity thefts.  Sometimes, tax scammers might be having very little information and they can use phishing emails to gain further information. It is very necessary for taxpayers to be aware of data breaches and secure their information in case of any breach.

i.Secure tax return filing

If taxpayers are filing tax returns using Wi-Fi, they must do it by the use of the secure connection. The filing of tax returns by using public Wi-Fi should be avoided by taxpayers. Moreover, if taxpayers are filing their tax returns by using mail they must do it directly from the post office. 

j.Report about frauds and scams

Taxpayers are encouraged to report any fraudulent practice, impersonation scam, phishing scam, etc. to the IRS by using the various tools of the IRS such as IRS Impersonation Scam Reporting, FTC complaint assistant or by sending mail to phishing@irs.gov.

Conclusion

Hence, taxpayers must be very alert about the different types of tax scams that are happening very frequently and must report to the IRS about such scams.