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How to Get Your Unclaimed Tax Refunds

Every year about a billion dollars' worth of federal tax refunds go unclaimed. It sounds unbelievable that so many people let their money get away from them, but you could be one of them! This happens for a variety of reasons, but it all leads to the fact that the IRS doesn't send tax refunds to people who don't file their federal income tax returns. You can't receive this money without asking for it first; be proactive!

The majority of these unclaimed tax refunds are for those who didn't make enough money during the year to be required to file a personal tax return. It's true, the IRS won't ask for a tax return from you if you make less than a certain amount of money each year. However, just because you don't have to doesn't mean you shouldn't. Chances are that even though you didn't make a lot, you still had taxes deducted from your paychecks. That money isn't gone for good; you can get some of that back with various tax credits and deductions. The first step is filing a return in order to be eligible to receive your refund.

Overlooked tax credits are also a reason for unclaimed tax refunds. While many tax credits are ignored, the most overlooked tax credits are the Earned Income Tax Credit and other economic stimulus credits from the past few years. It is common for people to file their tax returns on time, but still miss out on these credits. The IRS won't remind you about them. It's up to you to claim them. It's not always easy to know if you qualify for these credits, however, as tax laws are constantly changing.

How does one determine if they are owed money? How can you request it? The first thing to do is file a tax return. Tax returns must be filed within three years from the due date. After three years, your refund is absorbed into the treasury and is no longer available. This does mean that you can file late tax returns for the past couple years and claim refunds for those years if you qualified for those years.

Even better, there is no penalty for filing late if you qualify for a refund. Don't forget to get your tax documents together, specifically your W-2s. This may mean getting new copies from your employer(s) from those years. Once you have these documents, you can complete the tax returns. But before you send in those past tax returns, you need to make sure you're caught up on your taxes since then. That means you'll need to have your 2010 taxes taken care of before you can get back money from your 2009 tax return.

If you think you are one of the millions of people who have refunds waiting for you at the IRS, go after it. If you didn't make enough money in the past few years to be required to file, then you probably have the opportunity to get some of your tax money back!

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