According to the IRS, many tax refunds are unclaimed each year. Here are some simple steps to make sure yours isn’t one of them.
1. File your returns each and every year. One of the biggest culprits in unclaimed refunds is unfiled tax returns. If you neglect to file your return and you are eligible for a refund, the IRS will keep those funds for up to three years. Be sure to file your return if you’re in the three-year window for a refund.
2. Double(and triple-check) your numbers for accuracy. If you use tax filing software, the program will automatically check your math. Same holds true if you file your returns at a tax filing firm or have a tax preparer file your return. If you’re taking the DIY route and filing a paper return, however, be sure to double-check your calculations.
An inaccurate return will not only cause delays, but it could also delay any refunds you may have coming.
3. Report any address changes to the IRS directly. Don’t rely on the postal service to forward any IRS correspondence. The address on your return must match the address the IRS has on file in order to eliminate any delays in processing your refund. Your refund could also be delayed if it’s sent to your old address. You can also elect to have your refund electronically deposited into your bank account to avoid any further mail-related delays.
4. Take advantage of every tax deduction available to you. If you’re a low-income earner, you may be eligible for the Earned Income Tax Credit, for example. Parents should look into the Child Tax Credit and other child-related deductions. Homeowners may be eligible for mortgage-related deductions. If you’re not sure which deductions you’d qualify for, check with a CPA or a tax pro. They can assess your individual tax scenario and advise you of which deductions you can claim on your return.
Hundreds of thousands of dollar in refunds go unclaimed every year. Don’t let yours be among them. File a return every year, double check your numbers, quickly report any address changes to the IRS, and take advantage of the deductions available to you. Taking these steps will ensure you will receive the refund that is rightfully yours.