 Internal Revenue Service IRS tax news. IRS has $1.5 billion in refunds for people who have not filed a 2018 federal income tax return April deadline approaches. But first, an attempt at a joke I apologize in advance. I don't trust central banks anymore. It's getting to be like the old days where the only bank you can trust is deep down in the old dried up river bank. Possibly because central banks seem to be run by a bleeding herd of political intellectuals. And of course, we know what intellectuals are by the way they act whenever entering a room. They enter, lecture, until everyone's eyes roll. Hence, intellectual. Eyes rolling in annoyance at the vacuous, unpractical nonsense that keeps flowing from the intellectuals' lecture holes. Both of them. I keep thinking we just need to adjust the sound system a bit so we can hear the sound coming out of the right speaker. But no, it's no use. Honestly though, the nonsense talk doesn't bother me much. However, the non-transparency that the vacuous talks seems to promote does. IR 2022-66, March 25, 2022, Washington. Unclaimed income tax refunds totaling almost $1.5 billion. May be waiting for an estimated $1.5 million taxpayers who did not file a 2018 Form 1040 federal income tax return. But people must act before April tax deadline according to the Internal Revenue Service. So we're talking about the tax year of 2018. There's typically a statute of limitation or a time frame for which you can basically file the tax return and possibly claim the refund. So if you or someone else possibly has not filed the 2018, then maybe you want to look into it at that point and see if you possibly have a refund available to you. There's typically a three-year statute of limitation. So after that point in time, you can't go back and file. Then of course the question will be, well, how do I know if I or someone I know might be getting a refund if they were to file the 2018 tax return? One way you might kind of look into that is you might try to look into the filing of the current year tax return. And you can use free software to kind of help you out with that to look at some of the things that could possibly give you a refund. And that's things like the child tax credits, the earned income tax credit. And then these years you've got other things that are involved. Now that's not as easy to do as it was in the past because of all the laws changes that have happened in recent years. But that'll at least give you some idea of the refunds you might get in the current year and then think back and say, well, maybe some of this stuff will apply in the prior year. The reason I say to do it in the current year first is because you probably have accessibility to free software if your income is below a certain threshold. And so you could use the free software for the tax year 2021 to get an idea of any refunds you might get and then try to think back and see if you would get a refund in 2018 where you might not have access to the free software but it might be worth paying for software or for help to get the prior year tax returns done. Also note that you might be saying, well, I don't have the tax documentation for prior years like 2018 because I don't have the W-2s. For example, and I don't want to go back to my prior work. I've kind of separated from them. I'm not going back, right? So then you might then, you could try to, if you can't get it from your prior place of employment, go to the IRS website and get like a transcript or something like that. And you can log into your account because remember that all those documents have been sent to the IRS. That's probably in part how they know how much they're estimating 1.5 billion in refunds that have been going back out. That's probably how they're estimating that in part. So you want to go to maybe the IRS website if you can't get it from the original source, which would be the first place you would want to go and see if you can get that documentation to reconstruct your tax return. And if you're getting really close to the deadline and you can't get those transcripts in time, you might even want to guess to file, to do your best to file the tax return with the information you have. Because if you file the tax return, then it's in like tax return limbo at least, right? So the IRS might say, well, it doesn't quite line up to the W-2 information, for example. But you might have an extended period of time to adjust it at that point because you've taken action before basically the deadline. So you can keep that in mind as well. What could contribute to the refund, you might ask? Well, one, if you had W-2 in work, then you might have withholdings. So even if your income was low, you might have withholdings. And then two, there's always this earned income credit. So the earned income credit might apply and that's a refundable credit. So even if your income is very low, you may still access the refundable credit. That was still there in 2018, although it has changed. The laws have changed over time. And then you have the child tax credit, which again has drastically been changed in the current year. But it was always there before and there's generally a refundable portion to that as well. So, quote, the IRS wants to help people who are due refunds but haven't filed their 2018 tax returns yet, end quote, said IRS Commissioner Chuck Reddick, quote, but people need to act quickly. By law, there's only a three-year window to claim these refunds but closes with the year's April tax deadline. We want to help people get these refunds, but they need to file their 2018 tax return before this critical deadline, end quote. The IRS estimates the midpoint for the potential refunds for 2018 to be $813. That is half of the refunds are more than $813 and half are less. So I don't think you can put too much into these like estimates or averages because they are on average. So there could be big outliers when they get to these averages. So in any case, take it with a grain of salt, I would say. In cases where a federal income tax return was not filed, the law provides that most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury for 2018 tax returns. The window closes April 18th, 2022 for most taxpayers. Taxpayers living in Maine and Massachusetts have until April 19th. What? What's with that? What's with that? That's not fair. So they got that extra day if you're living in Maine or Massachusetts because of some holiday. The law requires taxpayers to properly address mail and ensure the tax return is postmarked by that date. The IRS reminds taxpayers seeking a 2018 tax refund that their checks may be held if they have not filed tax returns for 2019 and 2020. So even if you get the refund but you still haven't filed 2019 and 2020, they might hold on to that until you do because they're a little suspicious that something funny is going on over there with your lack of filing situation. So in addition, the refund will be applied to any amount still owed to the IRS or a state agency and may be used to offset unpaid child support or pass to federal debts such as student loans. So whenever you get the refund, the IRS, if you owe the IRS money in other years, for example, they'll take that money and apply it to the other years that you owe the money and they could apply it to state and child support as well. So, but at least, you know, someone's getting the money so it might still be worthwhile. Your loans go down a bit in that case possibly. By failing to file a tax return, people stand to lose more than just the refunds of taxes withheld or paid during 2018. Many low and moderate income workers may be eligible for the earned income tax credit the EITC for 2018. The credit was worth as much as $6,431. The EITC helps individuals and families whose income are below certain thresholds. The thresholds for 2018 were now this this amount is pretty deceiving. $6,431. That would be if you had, like, I think, three children, the maximum amount of children and you had the perfect amount of income because it's actually a pretty complex calculation to figure because your credit actually goes up with earned income. And then the child's going to take into consideration. So then the tables are all different by how many children are involved and then it goes back down after a certain threshold. So, tax software is really helpful for this credit. So, anyways, the threshold for 2018 were $49,194, $54,844 if married filing joint for those with three or more qualified children, $45,802, $51,492 if married filing jointly for people with two qualified children, $40,340, $4610 for married filing jointly for those with one qualified child and $15,270, $20,950 if married filing jointly for people without qualifying children. Tax year 2018 returns must be filed with the IRS center listed on the last page of the current form 1040 instructions, current and prior year tax forms such as the tax year 2018 form 1040, 1040A and 1040EZ and instructions are available on irs.gov forms and publications page or by calling toll free 800 tax form. And so there'll be a link to this in the description so you can get that information if you want by going to the link. However, taxpayers can e-file tax year 2019 and later returns. Taxpayers who are missing form W-2, 1098, 1099 or 5498 for tax years 2018, 2019, 2020 should request copies from their employer, bank or other payer. So obviously you want to go back to the source document and ask them for the stuff. But again, if you don't want to go back there, you're like, I'm never going back. Then maybe you can go get a transcript from the IRS because they have it too. They have it too. They could probably do their tax return by themselves at this point, given the fact that their nosy business already got all your information already, nosy people. But in any case, so you can get that from them. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at irs.gov. That's what I'm talking about. The transcript, that'll give you the information might not give you the state withholdings by the way if you have state withholdings because you're on the federal side of things. But it'll help you fill out the federal return at least using the get transcript option. So there's a link to that here. Alternatively, they can file form 4506T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS such as forms W2, 1098, 1099, form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return state by state estimated individuals who may be due 2018 income tax refund. So they broke down their estimates by state. I won't go over the states here, but if you think that's interesting, you could check it out. So they got the table here, breaking the info out by each of the states. So there's a link to this in the description so you can check that out if you want to and the other links that are in here. And so there'll be a link to this in the description.