Saturday, January 10, 2009

Claiming Your Refunds

If you have a string of unfiled tax returns with the IRS and you would like to get them all filed and get your refunds just keep in mind you are entitled to refunds going back only thee years. As the time approaches to file your 2008 tax return, due April 15, 2009, you will be able to claim a refund going back to 2006 (3 years – 2008, 2007 and 2006).

Likewise, if you have a refund due from years prior to 2006 then the IRS will not apply those refunds to any taxes owed. For example, if you owed the IRS $20,000 for the past 6 years, $4,000 from each year, and the IRS owed you a refund of say $3,000 from 2004, then the IRS would not apply that $3,000 to the total tax liability. I know this sounds rather stinky, however that’s the way it works. For more information as to how to best handle situations like these you should contact a tax professional.

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