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Tax season underway: What you need to know
Wealth strategist and tax expert David Ragland joins LiveNOW's Lexie Petrovic to outline what Americans need to know when filing their taxes as tax season began on Monday.
WASHINGTON - The Internal Revenue Service announced Monday that nearly 940,000 Americans have unclaimed refunds for the tax year 2020 – and the deadline to submit for a refund is quickly approaching.
According to the IRS, an estimated $1 billion in refunds remain unclaimed, because people haven’t filed their 2020 tax returns yet. The average median refund is $932 for 2020.
"There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns," said IRS Commissioner Danny Werfel. "We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds."
The deadline to submit for a refund is May 17.
Current federal tax forms. (Credit: Scott Olson/Getty Images)
Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury, according to the IRS.
But for 2020 tax returns, people have a little more time than usual to file to claim their refunds. This was extended due to the COVID-19 pandemic emergency.
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"People faced extremely unusual situations during the pandemic, which may have led some people to forget about a potential refund on their 2020 tax returns," Werfel continued. "People may have just overlooked these, including students, part-time workers and others. Some people may not realize they may be owed a refund. We encourage people to review their files and start gathering records now, so they don’t run the risk of missing the May deadline."
The IRS noted that taxpayers seeking a 2020 tax refund may have their funds held if they have not filed tax returns for 2021 and 2022. In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or other past-due federal debts, such as student loans.
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Current and prior year tax forms and instructions are available on the IRS.gov Forms & Instructions page.
Tax season officially began on January 29.
According to the latest tax season statistics, more than 71.5 million individual tax filings have been submitted to the IRS this season.
This story was reported from Los Angeles. The Associated Press contributed.