Nearly 1.5 Million Taxpayers Are ‘Leaving Money on the Table’ as Key Tax Deadline Nears, Advisor Says
- The deadline for past-due filings for 2019 is approaching with an estimated $1.5 billion in unclaimed refunds up for grabs.
- The median refund is $893, according to the IRS, with higher payments in certain states.
- The last chance to file or amend your return from 2019 and claim your refund is July 17.
There's a key tax deadline approaching for past-due filers, with an estimated $1.5 billion in unclaimed refunds up for grabs.
Nearly 1.5 million taxpayers still have pending refunds from 2019, with a median payment worth $893, according to the IRS. The last chance to file or amend 2019 returns to claim your money is July 17.
Falling early in the Covid-19 pandemic, the 2019 filing season may not have been a priority for some Americans, said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. "But the fact is, you're probably leaving money on the table."
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Typically, there's a three-year deadline to claim refunds for unfiled returns. But filers have more time for 2019 because of the Covid-19 pandemic.
Filing 2019 returns could yield "thousands of dollars," Lucas said, especially for those claiming the so-called earned income tax credit, a tax break for low- to moderate-income workers.
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The earned income tax credit is "refundable" because you'll still qualify for a refund when the credit exceeds taxes owed. The tax break may be worth up to $6,557 for eligible filers. "It's pretty substantial," Lucas added.
However, a lot of taxpayers don't realize they're forfeiting refunds by missing the three-year filing deadline, said Sheneya Wilson, a certified public accountant and founder of Fola Financial in New York. After July 17, unclaimed refunds for 2019 become the property of the U.S. Department of the Treasury.
How to start the filing process
Step one in filing your 2019 return is gathering the necessary tax documents. "The first thing that we do as a firm is ask clients to go into their IRS.gov portal," Wilson said.
You can login to download IRS transcripts, such as the wage and income transcript, which includes W-2s and 1099s. You can access IRS transcripts for the current season and three prior years.
"For many taxpayers, this is by far the quickest and easiest option," according to the IRS.
If you're missing forms for income, you can contact your current or past employer. "Most intermediaries and corporations are required to keep tax documents on hand for a minimum of three years," Wilson said. "So, they should be able to furnish those documents upon request."
Take another 'quick look' at 2019 returns
The July 17 deadline is also the last chance to amend your 2019 tax return, said Lucas. "It wouldn't hurt to take another quick look at your 2019 returns" for missed opportunities, he added.
For example, you may have skipped dependents, pre-tax individual retirement account contributions or health savings account deposits.
"If you forgot to put something on the return, you only have three years to get it back," Lucas said.
