This headline was just received from the IRS. According to the note from the IRS, “Unclaimed refunds totaling approximately $1.3 billion are awaiting over a million people who did not file a federal income tax return for 2005, the Internal Revenue Service announced today. However, to collect the money, a return for 2005 must be filed with the IRS no later than Tuesday, April 15, 2009.”
It is a well known fact that many people do not file their tax returns. The IRS is reaching out to people asking them to review their records to make sure they don’t leave money on the table in these tough economic times. There are a total of 1,343,000 individuals who may get a refund just by claiming it through their filing. Of that total, 41,000 individuals live in NJ and have the potential of receiving more than $43 million dollars in refunds.
IRS Commissioner Doug Shulman stated in a communication to tax practitioners that “People should check their records, especially if they had taxes withheld from their paychecks but were not required to file a tax return. They may be leaving money on the table, including valuable tax credits that can mean even more money in their pockets.”
By failing to file their tax returns, people run the risk of losing their refunds for taxes that were withheld from their pay check. They also run the risk of losing credits associated with the returns such as the Earned Income Credit. “Generally, unmarried individuals qualified for the EITC if in 2005 they earned less than $35,263 and had more than one qualifying child living with them, earned less than $31,030 with one qualifying child, or earned less than $11,750 and had no qualifying child. Limits are slightly higher for married individuals filing jointly” said the IRS.
There are many places in New Jersey and across the country where individuals can receive assistance to prepare and file their tax returns. Many of those places offer free service while others require a fee. It is important that all individuals make sure they file their returns and claim their refund and possible credit. There is no need to leave that money on the table.
Felix Ramirez is a partner with The Tax Group, a professional services firm specializing in tax services, accounting records and payroll processing. Felix can be reached at firstname.lastname@example.org.