by Melanie T. Collins
It’s hard to believe, but the IRS currently has refunds totaling $1 billion they’re keeping from American taxpayers who have not filed a 2013 Federal Income Tax Return – and if taxpayers do not claim it within the next month, the IRS pockets the dough!
Now, what would incentivize the IRS to do such a thing?
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Does the money go to something altruistic like solving world hunger?
Have a seat or clutch your pearls, because unclaimed refunds are not used solve the world’s ills. They’re immediately absorbed by the government.
According to award-winning author Eva Rosenberg, aka the “TaxMama”, Congress is responsible for this rule, not the IRS.
Unclaimed tax refunds sit in a restricted account for three years and are then moved to the general account, held in the US Treasury. Experts say the “general account” is exactly what it sounds like. In government accounting terms, “general account” means “this is where we post various costs, shortfalls, and budget deficits for which there is no accountability.”
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Here’s the bottom line: If you are a taxpayer who has not filed taxes in three years, unfortunately you’ve made a non-deductible contribution to the US government.
TaxMama‘s advice: “If you really hate the way the government is using your money, file your 2013 tax return immediately and take that money away from the government!”
Tuesday, April 18th is fast approaching, so here are eight “tricks” tax professionals suggest using to maximize YOUR refund, to make sure the cash you earned ends up where it belongs:
- Expenses while doing charitable work. You cannot deduct for your time while doing volunteer work… but you CAN deduct such things as travel expenses at 14 cents per mile. Record those miles
- Looking for a job? Job hunting costs are tax deductible. Travel expense and tolls at 54 cents per mile, cab fare, printing resume, and business cards are tax deductible job hunting expenses.
- Congratulations, you got the job! However, the new job is in a new city. Not a problem, TaxMama says. Relocation expenses may be tax deductible.
- In the military or reserves? Thank you for serving! If you travel more than 100 miles from home, your travel expenses may be tax deductible at 54 cents per mile, plus tolls and parking.
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- Hey, smarty pants! If you took a class to brush up on a skill in 2016, you might qualify for a Lifetime Learning Credit up to $2000.
- Dip into a retirement or investment account this year? The penalties may be tax deductible.
- How generous of you! You loaned money, and the loan was never returned? You may be eligible for a bad debt deduction.
- Overdid things a bit during that trip to Vegas? Just as we all certainly report winnings to the IRS, gambling losses may be tax deductible if you can show proof.
Of course, each deduction has specific criteria and limitations and consulting with your tax professional if you are uncertain about any deduction is always a smart move.
— Melanie T. Collins is a contributing writer for The Horn News and host of the “MoneyTalk with Melanie” show. She is an outspoken conservative with a passion for small government and finance.