Are You Missing A Tax Refund?

It's true, not everyone is required to file a federal tax return. If your income doesn't rise to a certain threshold, the government doesn't require you to file a tax return.

But if you didn't file a tax return there is no way to get a tax refund, if you are due one. And the Internal Revenue Service (IRS) reports in the tax year 2007 alone, 1.1 million people left more than $1.1 billion on the table, in the form of unclaimed refunds.

It's your money

Even though you might not have earned enough money to require filling out a tax return, taxes were probably withheld from your pay. Since you didn't earn enough to require you to file a return, you didn't earn enough to owe any taxes. Therefore, that withheld pay is yours, if you'll claim it.

However, to collect the money, a return for 2007 must be filed with the IRS no later than Monday, April 18, 2011. The IRS estimates that half of these potential 2007 refunds are $640 or more.

In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

The catch

And there's a catch. The IRS reminds taxpayers seeking a 2007 refund that their checks will be held if they have not filed tax returns for 2008 and 2009. In addition, the refund will be applied to any amounts still owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.

It goes without saying that if you weren't planning to file a tax return this year because you aren't required to, you could be leaving money on the table. No tax return, no refund.

If you don't file a return, you may be missing out on more than just your withheld pay. Many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). The EITC helps individuals and families whose incomes are below certain thresholds, which in 2007 were $39,783 for those with two or more children, $35,241 for people with one child, and $14,590 for those with no children.