Tuesday, January 5, 2021

Did You Miss Out on a Tax Refund?

Everyone likes money, and no one likes missing out on money that’s owed to them. Unfortunately,

though, this happens to a lot of people each year. The money that’s owed to them, in most cases, isn’t from an employer but from the IRS. The good news is that the IRS won’t purposefully try to withhold money that you’re owed. But, if you wait too long, it will, and it’s within its legal rights to do so!  

The Three Year Rule 

Generally, there’s a three year time limit on claiming funds owed to you by the IRS. This deadline is based on the date that your original tax return was due. So, if your tax return was due on April 15th of a given year, you have until three years from that exact date to claim any related refunds for that tax year. 

Extensions  

During some tax years, you may have a valid reason for why you are unable to file by the deadline. In these cases, the IRS may grant you an extension, which legally provides you with more time to file your taxes. In these instances, any refund to which you are entitled will not become uncollectible until three years from the extended due date. If, though, you file your taxes ahead of the extension date, that does change things. In these cases, your refund will expire three years from the date on which you actually filed.

The Seven Year Exception

As is the case with many IRS matters, there are some exceptions to these rules.

If, for example, your refund is owed due to deductions related to worthless securities or bad debt, you have more time to file and claim your refund. In fact, you have a full seven years!

You are also granted immunity from the three-year rule if you can prove that you were unable to claim your refund due to a mental or physical issue that caused incapacitation.

Ultimately, you should always claim any IRS refunds owed to you as soon as possible. After all, the sooner you do, the sooner you get your money! But, if you’re unsure about whether you’re owed money, if the statute of limitations has passed, or if you are a rare exception to the rule, don’t delay! The clock is always ticking with the IRS, and the sooner you take steps, such as enlisting the help of a professional, to claim the money you’re owed, the more likely it is that you’ll actually get it.

No comments:

Post a Comment

I welcome your comments here :)