Time for 2014 Refunds is Running Out

The IRS reminds us that about $1.1 billion in refunds may be lost to an estimated 1 million taxpayers who have not yet filed their 2014 federal income tax returns. That’s because you only have three years from the time your tax return is due to claim that refund. The 2014 was due April 15 of 2015, at that means after April 18, 2018; time’s up, no more refund.

Extensions do count. If your 2014 tax return was extended, you will have until October 15 of 2018 to claim that refund.

There is no penalty for filing a late tax return if it is for a refund. We see a lot of tax returns from part-timers, college students and teens who earn less than their standard deduction. For them, any tax withheld will be refunded. Those refunds are usually worth hundreds of dollars and that can be substantial to those taxpayers.

We have seen cases where people seemed to be intimidated by the IRS, so they just didn’t file their tax returns. Years went by. When the eventual IRS letter came, and we caught up the back tax returns, they lost out on three or four refunds.

Two acquaintances of mine refuse to file their tax returns because they do not want the IRS to know where they live. After looking over their W-2, which is how the IRS knows where you live, I assured them that they would get a refund. I said I’d do it for free. I suggested charity, but nope. Three years and one day after the original due date, that money becomes the property of the U.S. Treasury.

Many low and moderate income earners with children may be entitled to the Earned Income Tax Credit which is refundable; meaning in addition to your withholding. If you fit into this category you should never miss filing your tax returns timely.

If you think you might owe taxes for 2015 or 2016 there’s a chance that the IRS knows that too, and your 2014 refund might be held up until you file the 2015 and 2016 returns. If you are missing tax forms like your W-2, contact your employer, or order an IRS transcript at www.irs.gov using the www.irs.gov/individuals/get-transcript to access the Get Transcript Online Tool.

If you are just not sure, and you work, then it is in your best interest to at least arrange for a consultation from a licensed tax professional.

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