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The Online Advisor

April 2008


What's New in Taxes
Act fast or you'll lose your refund


If you didn't file a tax return for the year 2004, you're not necessarily in trouble. In fact, you could be about to lose out on a nice refund check. The IRS reports that it is holding an astonishing $1.2 billion in refunds from the year 2004. Here's how the situation arose.

Approximately 1.3 million filers, many of them students and retirees, had taxes withheld from their earnings that year but didn't bother to file a return. That was quite legal if they didn't earn enough to reach the minimum income for required filing. And in many cases they forgot that taxes had been withheld and that they were eligible for a refund. For example, a student might have worked at a summer job, gone back to school in the fall, and not given taxes a second thought.

If you think you are due a refund for 2004, it's worth filing a return. The IRS estimates that around half those who are eligible would receive refunds of just over $500. In some cases, you could find you're eligible for even more than the refund. If you were a low-income worker that year, you might also have qualified for the earned income tax credit. But you'll need to act fast. Unless you file a year-2004 return by April 15, 2008, the statute of limitations will have run and you'll be too late to claim your refund.

Be aware that the IRS won't issue a 2004 refund check unless you've also filed returns for years 2005 and 2006. And if you owe taxes for those years, they'll deduct that from the amount of the 2004 refund.

Worried about late-filing penalties? Here's good news: They're typically not assessed if you file a return showing a refund.

According to the IRS, over a million people are eligible to claim refunds for tax year 2004. If you're one of them, or if you haven't filed returns for other years, give us a call. Acting now can save your already-paid-in tax dollars.


For details or for assistance with your tax planning, give our office a call.

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