Tax time can be stressful for many people. It is easy to get overwhelmed and let the deadline pass. After the initial filing deadline each year, many think it is too late to go back to file if they have a return coming. This is not the case for literally a million Americans who have yet to file their 2014 returns.
At this very moment, the Internal Revenue Service (IRS) estimates that there are about one million taxpayers owed money by the IRS for 2014. The IRS is currently holding over $1 billion for those unfilled returns. The IRS Acting Commissioner David Kautter cautions anyone who might have money coming to fill out the forms before the deadline.
For those who, for whatever reason, not filed the 2014 return, the deadline to get their refunds is this year’s filing date. After April 17, 2018, they will no longer have a check coming for the 2014 return. After the deadline, the money will go to the Department of Treasury.
There is a misconception that filing this late will come with a penalty. This would be the case for someone owing taxes, but there is no fine for filing a return late that results in a refund.
Another reason for such a high number of unclaimed refund checks is tied to the idea that there is always a hefty fee for filing taxes.
While there are plenty of places that do charge either online or in person to file tax returns, there are also a variety of online sites that allow them to be filled for free.
Many taxpayers may not be aware that there is an option to file free for anyone who makes less than $66,000 a year. Workers in the lower wage categories are far more likely to not file tax returns.
The most significant issue with filing late when one is due is a refund missing the deadline years later.
At this point, if someone has a refund coming from 2014 the refund amount is just not valid after the approaching deadline.
On average, the outstanding refund checks add up to about $847. The state of Texas has the most substantial number of people needing to file for the 2014 returns.
In Texas alone, there are at least 108,100 unclaimed tax returns. The check amounts due to these Texans is slightly higher than the national median at $899.
The dollar amounts due to residents of both North Dakota and Wyoming are even higher than the Texas checks. While these two states have the lowest number of outstanding refunds due, they have the highest value.
The checks for residents of Wyoming tip the scale at a median of $973. North Dakota residents can expect a return check to be right around their average of $952.
With one million taxpayers not filing for money owed in 2014, there are some that question why all this money is still sitting around. Beyond confusion about costs to file, there are also some that just may not know they are even due a refund.
There is an assumption that every refund check is paid out to people having too much taken out of their check each pay period. This may not be the case.
It is possible for someone to have nothing withheld from their paychecks and still have a refund coming.
Low-wage workers can benefit from several tax credits that can result in them being owed a tax refund regardless of not paying any taxes into the system.
One such tax credit is tied to tuition payments for college. This is the American Opportunity Tax Credit and can mean that undergraduate students get a break on their taxes.
Another credit, the Earned Income Tax Credit (EITC) allows lower-wage earners to benefit from a credit based on the fact that they are supporting one or more dependents.
A final credit that often goes missed on returns is the Child Tax Credit. This allows taxpayers to use expenses like childcare to reduce their overall tax burden.
Something as simple as missing a tax credit can mean people are owed a return they were not aware of. It is always worth the time to file a tax return even if one is not owed a return to make sure they are getting the proper amount of credit for things like Medicaid and Social Security taxes.
For those needing to file taxes for 2014, the IRS suggests accessing paper forms. They are available for download for free and can be sent in to be processed.
There may be websites that offer the 2014 option to file, but because it is outdated, they can charge full price for the service. Using paper forms directly to the IRS results in no filing charges.
Because some people do not file tax returns when they are missing forms like the W-2 from their employer, the IRS also suggests requesting a “Wage And Income Transcript” on the IRS website. This will show each of the required forms to file the 2014 return.