Does the IRS Have Hidden Money Waiting for You to Claim?
NEW YORK ( MainStreet) The Internal Revenue Service is looking to give people money. Believe it or not, it's true. The IRS has nearly $760 million in unclaimed refunds due people who did not file returns for tax year 2010. The average amount is $571, and all the beneficiaries have to do to claim their windfalls is file a 2010 return by April 15, 2014. After that, things go back to normal: pigs still won't be able to fly and the IRS will go back to collecting money instead of distributing it.
In most instances, this situation has come about, because people worked during all or part of the year and earned wages. Their employers withheld the taxes. Then it came time to file tax returns for 2010. At or about that point, these wage earners realized they had not earned enough to be required to file. In 2010, that threshold was $9,350 for an individual. So, they didn't file, even though they would have gotten refunds if they had.
Nearly 1 million people are due an unexpected windfall from this. The typical example is a student, according to Shomari Hearn, a vice president at Palisades Hudson Financial Group in Fort Lauderdale. "It's also part-time employees who are below the filing threshold," Hearn said. "They figure, 'I'm not going to get any money back and I'm not required to file.' As a result this money sits there."
Non-filing parents might also be due refunds thanks to the Earned Income Credit, added Brian Lenart, a partner with Philadelphia-based accounting firm ParenteBeard. According to Lenart, a parent who made as much as $40,000 in 2010 could meet the EIC threshold if he or she had a few qualifying children.
All taxpayers have to do is visit the Forms and Publications page of the IRS website at IRS.gov and download a 2010 tax form and instructions. You can also call toll-free 800-829-3676 to have them mailed. Most people who qualify for this refund will be able to use the 1040-EZ or another short form.
People missing a W-2, 1099 or other form needed to find out how much they earned, should be able to get one from their former employer. Another option is to get a free transcript of the forms' information at the IRS website .
If this sounds like a lot of trouble, remember that the average refund in this scenario is $571. Plus, taxpayers may also be due refunds of state taxes. Not only that, but these unclaimed refunds pile up every year, and may go unclaimed by the same people. "If they haven't filed in 2010, there's a likelihood of a similar situation in 2011 and 2012," Lenart pointed out. "Which would mean an opportunity for multiple-year refunds."