The IRS has reported that over $1 billion in 2021 tax refunds remains unclaimed. Around one million taxpayers could lose this money if they do not file their tax returns before April 15, 2025, the official deadline to request refunds for the 2021 fiscal year.
How to Claim Your Refund Before It’s Too Late
Under federal law, taxpayers have three years from the original filing deadline to claim their refunds. After this period, the unclaimed funds are transferred to the U.S. government.
For the 2021 tax year, the claim deadline is April 15, 2025. If you miss this deadline, you will lose an average of $780 in unclaimed refund money, according to IRS calculations.
The IRS warned that time is running out for those who missed filing in 2021. If you were expecting a refund and haven’t filed yet, now is the time to act before you lose your money.
What You Need to Do Now
If you have not yet filed a return for 2021, it’s crucial to gather the necessary documents like W-2 or 1099 forms. The IRS allows taxpayers to access their income records and transcripts through an IRS.gov account. However, ordering physical copies of past documents can take several weeks, so it’s best to check digital options first.
Can I Use an Online Tax Preparer?
While most tax preparation software does not support prior year returns online, you can use desktop versions of tax software like H&R Block, TurboTax, or TaxAct for filing 2021 returns.
You will need to purchase the desktop version, complete the forms, and then print and mail the tax return. Keep in mind, this process may take additional time, especially if you need income information from previous employers.
Claim Your Recovery Rebate Credit
In addition to the refund, some taxpayers may be eligible for the Recovery Rebate Credit. This credit is linked to the 2021 stimulus checks and can provide up to $1,400 for single filers and up to $2,800 for couples. Families with dependents could receive more, with a family of four qualifying for up to $5,600.
Even if you did not receive the original stimulus checks, you can still claim the Recovery Rebate Credit on your 2021 tax return. However, if you miss this opportunity, you will lose both your refund and the credit, according to the IRS.
Tax Preparation Options Available for Late Filers
If you need help filing a late 2021 return, services like H&R Block, Liberty Tax, and Jackson Hewitt offer in-person and online assistance for past returns. TaxAct is known for offering affordable software, while the IRS Free File program provides free tax filing for low-income taxpayers.
It’s important to note that digital platforms do not allow late returns to be submitted electronically. You will need to download the desktop version of your preferred tax software, complete the return, and then mail it.
Tips for Filing Your 2021 Return
The IRS encourages taxpayers to start the filing process early to avoid mistakes or delays. Here are some tips to help:
- Verify your mailing address to ensure your tax documents reach you.
- Review your bank statements and ensure your income data is accurate.
- Confirm your information with previous employers to avoid discrepancies.
- Request extensions if needed, but keep in mind that extensions do not extend the April 15, 2025 deadline for filing your 2021 return.