Thread: 5 things you need to know about: Your 2009 tax returns

5 things you need to know about: Your 2009 tax returns

By Jennifer Davies, UNION-TRIBUNE STAFF WRITER
Saturday, March 27, 2010 at 12:04 a.m.

It’s that time of year where you either feel smug because you’ve already filed your taxes or you’re a bit sheepish because you haven’t even opened up your W-2. But with only 20 days left to procrastinate, here are some statistics to get you motivated:

State refunds. The good news is the state has no plans to issue those cool IOUs that it sent out sent out last year. So if you’re due a refund, you’ll get your moneys. The bad news is that so far the average refund is down, coming in at $610 compared to $698 for tax year 2008. By the way, if you file electronically, you can get the cash within a week. The paper route more to your liking? Well, then hopefully waiting is, too, because it could take as long as six weeks to get your refund.

State filers.Typically, California receives about 15 million personal tax filings. As of March 24, the state has received about 7.6 million filings — with 6.4 million of those filed electronically. The take-away? If you haven’t filed yet, don’t feel too bad, because you have plenty of company.

Federal refunds.According to its most recent numbers, the IRS has issued about 58.8 million refunds worth about $175.4 billion. Last year, the U.S. Treasury paid out $320 billion in refunds to 78 percent of all filers. So far, the average refund for this year is $3,036, which is up almost 10 percent from last year, when the average refund was $2,770. If that’s not a reason to get cracking on those taxes, we don’t know what is.

Federal filers. To date, about 68.7 million folks have filed their taxes and 56.8 million of those have been filed electronically. But apparently we are not a nation of do-it-yourselfers, as tax professionals accounted for 63 percent of those e-filings.

More money. As you struggle with your tax forms, consider this: The IRS has more than $150 million in unclaimed refunds for California taxpayers from 2006. The catch is that after three years those unclaimed funds becomes the property of the U.S. Treasury — so you need to act fast and file a 2006 return by April 15.

http://www.signonsandiego.com/news/2010 ... x-returns/

More money. As you struggle with your tax forms, consider this: The IRS has more than $150 million in unclaimed refunds for California taxpayers from 2006. The catch is that after three years those unclaimed funds becomes the property of the U.S. Treasury — so you need to act fast and file a 2006 return by April 15.

I wonder how much of this money was withheld by employers and sent to the I.R.S. and the employee hasn't claimed their refund because they were using fake or stolen IDs, and/or they have been deported and can't claim their refund. $150 million for just one state for 1 year, unclaimed.

If so John, that much will not be getting sent back to their countries

Originally Posted by uniteasone

If so John, that much will not be getting sent back to their countries

I'm trying to find a total for all states for 2006, 2007 and 2008. No luck yet.
Would they mind if I applied for a few of those refunds?

Unclaimed IRS tax refund database: See if the IRS has a check ...

Nov 19, 2009 ...

The Internal Revenue Service is looking for taxpayers who are due $123.5 million in 107,831 refund checks that were returned to the IRS by ...

www.mercurynews.com/ci_13824729

Unclaimed Money Search - Find missing money, unclaimed property . . .

The U.S. federal government holds even more, including $17 billion in unredeemed savings bonds,

and hundreds of billions of unclaimed dollars in IRS refunds . . .

www.unclaimedassets.com/

U.S. Unclaimed Property and Missing Money Search

Under US unclaimed property law, financial assets are considered dormant, unclaimed and abandoned when contact with an owner or heir is lost over an extended period. This often happens due to a name change after marriage or divorce, an unreported change of address or expired postal forwarding order, incomplete or illegible records, and most commonly, after an untimely death.

When owners or rightful heirs fail to claim a forgotten asset over a specified number of years known as the dormancy period, those left holding the abandoned funds: banks, stock brokers, utilities, employers, life insurance companies and government agencies themselves - transfer custody to an unclaimed property trust account in a legal process known as escheat. Here this lost cash awaits your claim.

The state of New York currently holds nearly $10 billion in unclaimed funds. California and Texas abandoned property adds $10 billion more. But this isn't just a big state phenomenon. Local governments recently collected $23 billion worth of missing money, of which less than $1 billion was reclaimed. The U.S. federal government holds even more, including $17 billion in unredeemed savings bonds, and hundreds of billions of unclaimed dollars in IRS refunds, retirement and Social Security checks that went undelivered or weren't cashed.

It's important to understand millions of family members are totally unaware they’re entitled to collect missing moneys owed deceased relatives, who passed on without leaving an updated will or complete financial records.

One in three life insurance policies are never paid, for example, because it's up to heirs to notify the insurance company when a policyholder dies, and virtually no effort is made to find lost beneficiaries and missing heirs.

http://www.unclaimedassets.com/

Rushing to do taxes? Avoid these 10 last-minute mistakes

By Sandra Block, USA TODAY

With the April 15 tax deadline looming, many folks have sweaty palms and heart palpitations. At times like these, though, remember what you probably learned in the first grade: When you hurry, you're more likely to make mistakes. Here's a look at 10 last-minute errors that could delay your refund or attract unwelcome attention from the IRS:

1. Incorrect Social Security numbers

In 1987, the IRS started requiring parents to provide Social Security numbers for children who were claimed as dependents on their tax returns.

If you omit Social Security numbers for any of your dependents — or use a wrong SSN — the IRS may disallow the exemption. You also could lose some valuable credits, such as the child tax credit, the child and dependent care credit and the earned income tax credit.

When you enter a dependent's last name, make sure it's the exact name that appears on the child's Social Security card. Likewise, if you got married and changed your name, make sure you notify the Social Security Administration before you file your taxes.

Whenever a name doesn't match a Social Security number, "It will raise a red flag and delay processing" of your refund, says Amy McAnarney, executive director of H&R Block's Tax Institute.

2. Incorrect bank account information

The IRS strongly encourages taxpayers to file electronically and arrange for direct deposit of their refunds. E-filing reduces errors and enables you to get your refund in a couple of weeks, vs. four to six weeks for paper-filed returns. But if you go this route, take extra care when you plug in your routing and account numbers. Otherwise, your money could end up in someone else's bank account.

This year, you can arrange to have your refund deposited in up to three accounts, including an individual retirement account. You can also use all or part of your refund to buy inflation-adjusted Savings Bonds.

3. Overlooking charitable contributions

If you itemize, you can deduct donations to qualified charities. But many taxpayers who give throughout the year fail to claim all of their contributions, says Mary Canning, dean of the School of Taxation and Accounting at Golden Gate University in San Francisco.

Not all charities send letters acknowledging contributions, Canning says, so review bank statements and credit card receipts for donations you may have forgotten.

In addition, you don't have to wait until next year to deduct contributions to charities that provided relief to victims of the Jan. 12 earthquake in Haiti. Contributions made Jan. 12 through Feb. 28 can be deducted on your 2009 tax return.

4. Missing deductions on tax breaks

About 65% of taxpayers claim the standard deduction because they don't believe they have enough deductions to justify itemizing. But even if you claim the standard deduction, you could be eligible for tax breaks available to non-itemizers:

•Taxes on the purchase of a new car. You can deduct state and local taxes paid for a new vehicle purchased after Feb. 16, 2009, and before Jan. 1, 2010. You can deduct taxes on up to $49,500 of the purchase, even if the vehicle cost more than that.

•State and local property taxes. This tax break primarily helps homeowners who have paid off their homes or don't have enough mortgage interest to itemize. You can increase your standard deduction by up to $500, or $1,000 if you're married, to cover your property taxes.

This deduction isn't limited to your principal residence.

5. Missing the Making Work Pay credit

Last year's economic stimulus package provided a tax credit of $400, or $800 for married couples. Most workers who have taxes withheld from their paychecks received the credit throughout the year through an adjustment to their withholding. But when you file your tax return, you will still need to claim the credit. Otherwise, your refund could be delayed. The IRS says more than 2 million taxpayers have made errors in connection with the credit.

6. Not reporting the stimulus payment

As part of last year's stimulus package, Social Security beneficiaries received a $250 one-time Economic Recovery Payment. This payment isn't taxable. However, if you had earned income last year, you may have also received a Making Work Pay credit. In that case, you're supposed to reduce your credit by the amount of your recovery payment. Failure to do this could delay your refund.

Seniors who receive their Social Security benefits through direct deposit also received their Economic Recovery Payment that way and may have forgotten by now, McAnarney says. The IRS didn't send out a notice about the payment, so if you're not sure if you received one, check your bank records. The IRS recently launched an online tool to help seniors track their payments. Go to www.irs.gov and search under "Did I Receive A 2009 Economic Recovery Payment?" or call 866-234-2942.

7. Misunderstanding medical expenses

You can only deduct the the amount of unreimbursed medical expenses that exceeds 7.5% of your adjusted gross income. That's a high threshold, but rising health care costs have put this deduction within reach of many taxpayers, Canning says.

Eligible expenses include deductibles, co-payments, unreimbursed dental costs and even eyeglasses, she says. Transportation costs, such as mileage and parking when you go to the doctor, are also deductible. You must itemize to claim this.

8. Paying unemployment benefits taxes

You may have heard that unemployment benefits are taxable, and that's usually the case. But for 2009, up to $2,400 in unemployment benefits are tax-free, McAnarney says, so you'll need to subtract that amount from your total benefits when calculating your taxable income.

9. Thinking you're late for 2009 savings

If you qualify, you can still make a deductible contribution to your 2009 individual retirement account, says Gary Lundberg, product management director for CompleteTax, an online tax software program. Eligible taxpayers can reduce their 2009 taxable income by up to $5,000, or $6,000 if they're 50 or older. The deadline for 2009 IRA contributions is April 15.

For 2009, workers who are covered by an employer-provided 401(k) plan or pension must have modified adjusted gross income of $55,000 or less to deduct the full IRA contribution. Those with MAGI of between $55,000 and $65,000 can deduct a reduced amount. If your MAGI exceeds $65,000, and you're covered by a retirement plan, you can't deduct your IRA contribution. For married couples who are covered by a retirement plan at work, the deduction phases out between $89,000 and $109,000.

If you're not covered by a retirement plan at work, you can deduct the full contribution, as long as you earned at least the amount of your contribution. The same goes for married couples when neither spouse is covered by a retirement plan. If your spouse is covered by a retirement plan but you're not, you can deduct a full contribution to your IRA as long as your combined MAGI is $166,000 or less. If your MAGI is between $166,000 and $176,000, you can deduct a partial contribution.

IRA contributions are an above-the-line deduction. You don't have to itemize to claim them.

10. Forgetting to sign your return

If you file on paper, make sure you sign your return before you mail it in. An unsigned return, the IRS says, is invalid. Even if your return was prepared by someone else, you're still required to sign it, McAnarney says. Your preparer should sign it, too.

http://www.usatoday.com/money/perfi/tax ... void_N.htm