An estimated one million taxpayers did not file their 2012 tax return and time is running out for being able to collect any refund owed to you from that year. This coming tax day on April 18, 2016 (the 19th in Massachusetts and Maine) is the deadline for seeking payment. Many people who have not filed their tax return become scared that they will be hit with a huge bill, and they just might. However, a surprising number of people who do not file are actually owed a refund rather than needing to pay.
$1 Billion in Uncollected Refunds
The IRS has announced that there is nearly $1 billion in uncollected refunds from 2012, with the midpoint due to each taxpayer estimated at $718. This means that about half of the refunds are over this amount and half are under. To make it even more appealing to go ahead and file for your return, there is no penalty for filing a late return if you have a refund instead of owing taxes.
The IRS has broken down the number of individuals, median potential refund, and total potential refunds by state. California has the most, with 94,900 taxpayers needing to file a return to get a refund, for a total of $82,782,000, which translates to a median of $656. Montana has the fewest at 3,500, which translates to $3,083,000 and a median of $669.
The Deadline Approaches
Once the three-year window has closed, the funds for any unclaimed tax return becomes the property of the U.S. treasury, so you can kiss that money goodbye. There are only a few weeks left for the 2012 tax return. To make sure that your return reaches the IRS and is properly processed, it is essential that it is addressed correctly and postmarked by the due date. It is also important that you have filed your 2013 and 2014 returns. Otherwise, the IRS may hold your refund check. If you owe any back taxes, the refund will most likely be applied to that debt. It may also be used towards any unpaid state taxes, student loans, or child support.
Why File a Return for Back Taxes
It is to your benefit to file a tax return in which you make money. If you do not file a return, the IRS will file one on your behalf, known as a Substitute For Return (SFR). When the agency does this, it uses the income information received from employers, and it does not apply any credits or deductions beyond the standard deduction. This means that you may end up owing more tax than you would if you were to fill out a return. Some people who choose to file a return to replace the SFR after receiving a hefty tax bill are pleasantly surprised to find that instead of owing the IRS money, they actually are due a refund.
Tips for Filling a 2012 Return
If you plan to file a past year’s tax return, it is possible to find the forms through the IRS website and local offices. You can also get your previous years’ W-2, 1099, 1098, or other forms from your employer, bank, or other applicable organization or person. If this is impossible, the IRS can provide you with a paper copy of the transcript that they use to determine your income. You can use this document to compile your tax return.
It is to your benefit to file a tax return every year, even if you owe money. If you are issued a bill from the IRS for your unfiled back taxes, it is even more important that you go ahead and file your return. Fidelity Tax Relief is here to help you with your tax debt and back taxes, including assisting you in obtaining the refund due to you. Call us today at 877-372-2520 to discuss your tax problem and find out what options you have.