One of the most significant issues with US taxpayers at the moment is the possibility of missing out on a tax refund of hundreds of dollars. On the latest IRS announcement, issued more than 1.1 million Americans are yet to file their 2021 tax refunds. The IRS officials are cautioning that the day to retrieve the cash is closing fast and those who haven’t done that yet should hurry up and do it by April 15, 2025.
Apart from the $1 billion in refunds that remain unclaimed, the Treasury Dept. is sitting on, the Internal Revenue Services announced that it is quite possible that the sum might have surpassed the $1 billion mark in the meantime. The IRS confirmed that non-compliance by taxpayers will mean that the federal government will henceforth own those monies.
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This matter is not only localized and presents a challenge to the U.S. citizens at large because certain states are showing higher average refund amounts. For instance, Alaska, on the top with an average unclaimed refund amount of approximately $832, whereas, in other states also, like the case of Colorado, many dollars are there and crystallized awaiting liable taxpayers. This money, if distributed, could be a boon to several people, among other things, for purchasing groceries, bill payment, or even the repayment of loans.
What Are the Reasons Behind?
The IRS suggested that some have just forgotten or their 2021 tax returns filed were not due to some restrictions imposed by the COVID-19 outbreak. Yet, others might not even know that they are eligible for a refund. The counselors mentioned that many of them were part-time workers, students, or those having lesser incomes who refused to file taxes if they did not owe anything. Nevertheless, the significant number of them were still qualified for refunds.
It is mandatory for taxpayers to complete the documentation about returns and request refunds within three years regarding a determined tax year since the latter is the maximum statutory limitation period. In the case of 2021, the door is open until April 15, 2025. In case the deadline expires, the money will be lost and the taxpayer cannot claim the refund even before the statute of limitations for assessment expires.
There is a high likelihood that aside from the basic refund, taxpayers who are eligible may also be losing the opportunity to acquire an Earned Income Tax Credit (EITC). For 2021, the EITC was valued at a maximum of $6,728. It is a credit that is meant for qualifying low and moderate-income workers. A key detail from the IRS that has been underscored is the possibility of the boosted refund amount, which arises from the non-existence of prior awareness on the part of the taxpayer.
Things You Must Clutch Onto the Knowledge Before Claiming Your Refund
It was also made clear by the IRS that people who are thinking of claiming their refund for 2021 need to ensure they have also submitted their 2022 and 2023 tax returns. If these later returns are absent, the IRS will not process the 2021 refund without waiting to receive all the required filings.
Another fact that needs to be taken care of is the possibility of the withholding or reduction of the refund amount by the IRS. For that, such examples of debts as unsatisfied child support, student loans, or federal taxes that are past due can be the cause. The Debtors have to receive a notification if it’s the situation.
What Tactic You Need to Employ to Claim Your Unbooted Refund
IRS instructs people that they should act fast. To get the 2021 refund, you have to file the 2021 tax return before the deadline. A tax professional, tax software, or visiting the IRS website are the ways you can file.
Another tool that taxpayers can use is called Where’s My Refund?. It allows those who have filed to check the refund’s status.
The IRS also offers advice in the form of a suggestion and recommends a way that you can use to find previous tax records. It suggests that you create a My Social Security or IRS Online Account to look for your previous records such as Form W-2s and other statements of income.
Why This is Important
A refund can be seen as a mere extra thing by some people. But, for others, a refund can be a big change. Especially, for households with the additional living costs, they would experience it as it would be between $700 and $832, given the area of their living. This estimated refund is the basic source of that much loss of money.
The Internal Revenue Service (IRS) is strongly recommending all those individuals who failed to file for 2021 that they should quickly check their eligibility. Once the deadline has been reached, no one will be able to get another opportunity.
Should you need more detailed information besides instructions for filing a return, go to the IRS official newsroom or, alternatively, get in touch with a licensed tax preparer.
