Tax Strategies & Credits
Are There Unclaimed Tax Refund Dollars With Your Name On It?
Every year there are plenty of individuals who don't file a tax return, and as a result roughly $1 billion in refunds go unclaimed every year. The IRS says that of that billion unclaimed refund dollars, roughly half is for an amount that is greater than $847 - that's a lot of money to leave on the table for the government. If you are one of those that chose not to file a tax return because you believed that your employer's withholding was all that you needed, there's a chance that some of that unclaimed money belongs to you.
Here are a few ways that could happen:
Your employer over-withholds on your behalf - Though most employees assume that their employer withholds the correct amount of taxes on their behalf, this is not always the case.
Earned Income Tax Credit (EITC) - The EITC can be difficult to understand, but it is a credit specifically established for the benefit of taxpayers who earn less than a certain amount. In 2014 that amount was $52,427. Those who qualify can receive a credit as high as $6,143 payable as a refund.
Child Tax Credit- Taxpayers that have one or more children under the age of 17 are entitled to file for the Child Tax Credit, a nonrefundable credit that reduces the amount of taxes owed. If you are low to moderate income and the credit exceeds the amount of tax that you owe, a portion may be refundable up to $1,000 per child.
American Opportunity Tax Credit (AOTC) - For those who have family members pursuing post-secondary education, the AOTC can provide a credit of up to $2,500 per eligible student. In order to qualify the student must be enrolled at least half time for at least one academic period during the tax year. The AOTC credit is partially refundable, so even those who do not owe taxes may be able to get up to forty percent of it back.
Premium Tax Credit (PTC) - Many of those who purchased their health insurance through the government marketplace last year were entitled to a subsidy in their premium. This subsidy is known as the premium tax credit, and if you received it ahead of time you are required to file a tax return in order to make sure that the credit was in the correct amount. If the subsidy that you received was not as high as it should have been then you may be owed money.
All of the examples cited above are common examples of how an individual may be owed an income tax refund. However, the only way that a taxpayer can be reimbursed for having paid too much to the government is if they file an income tax return. If you believe that there is a possibility that you are owed some of the $1 billion in unclaimed tax refund, you have three years to file a tax return from a previous year. The deadline to file a claim for 2014 is April 17, 2018 - otherwise the possibility of getting the money that you may be entitled to will be lost.
Musheerah "Shalom" Kolen
Located in Fredericksberg VA, Musheerah "Shalom" Kolen is the owner of Kolen Services. She is a specialist in many services that include tax accounting and is a certified Quickbooks ProAdvisor. With her extensive background as military veteran she is very knowledgable in government regulations and various business concepts. With years of experience and knowledge of the tax and accounting industry she can help you get the information and outcome you deserve. Musheerah enjoys educating her clients with tips and tricks that can help save you lots of money. Read this weeks article and stay turned for next weeks.
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