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24May 2017
May 24, 2017

Unclaimed Refunds in California

Over $82 Million in Unclaimed Refunds in California

The IRS has announced that there is currently some $950 Million in unclaimed income tax returns, $82,782,000 in the state of California alone. The IRS is still awaiting federal income tax returns from as many as 1 million people dating back as far as 2012.

Commissioner John Koskinen of the IRS states, “A surprising number of people across the country overlook claiming tax refunds each year. But the clock is ticking for taxpayers who didn’t file a 2012 federal income tax return, leaving nearly $1 billion in refunds unclaimed,” adding, “We especially encourage students and others who didn’t earn much money to look into this situation because they may still be entitled to a refund. Don’t forget, there’s no penalty for filing a late return if you’re due a refund.”

The estimate the IRS has set for unclaimed tax returns is about $718, with about half being higher and the other half being lower.

When a worker fails to file a tax return, the IRS allows a three-year window for that worker to claim any refund(s). Should the worker fail to meet the three-year guideline, any monies due as a refund becomes property of the United States Treasury.

The IRS also informs that in order to claim any refund monies, all subsequent tax returns must also be brought current. The current due date for tax returns is April 15 of the following year and penalties could  be enforced on any returns not postmarked on or before April 15.

The IRS also states that any refund monies owed to you will be subject to any subsequent taxes you may owe. Any funds due the IRS for subsequent tax returns will be deducted from the refund(s). The IRS may also hold tax refunds to satisfy any outstanding child support claims or other overdue federal debts including student loans.

The IRS also warns that failing to file your return could result in loss of certain deductions. For example, if you qualify for an Earned Income Tax Credit (EITC), you will lose this credit which is worth about $5891. This tax credit is in place to help families whose income falls below a certain threshold. These thresholds are currently:

  • $45,060 ($50,270 if married filing jointly) for those with three or more qualifying children,
  • $41,952 ($47,162 if married filing jointly) for people with two qualifying children,
  • $36,920 ($42,130 if married filing jointly) for those with one qualifying child, and
  • $13,980 ($19,190 if married filing jointly) for people without qualifying children.

 

Need to get caught up on past tax returns? Call the accounting professionals at MBS Accountancy Corporation and learn about long term investment strategies.

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