Courtesy Kay Bell, bankrate.com/ yahoo finance
If you’re still waiting for your economic stimulus payment, it might be in one of the more than 383,000 pieces of mail returned to the IRS.
Those envelopes were undeliverable because of bad addresses. That’s left taxpayers frustrated as the IRS tries to figure out how to get $266 million in tax rebate and regular tax refund checks to the rightful owners.
The good news is that it’s easy to let the IRS know where to resend your rebate or refund check.
But don’t dally. If it’s a rebate you’re waiting on, you only have until Nov. 28 to claim your cash.
Most of the money that didn’t make it to taxpayers is from returned rebate checks. They total $163 million, with the average rebate coming to $583.
The regular refunds are fewer and account for only $103 million, but the average returned refund check is $988.
Of course, those amounts are averages. Your unclaimed check might be less, but then again, it could be more. And any amount of money would be nice, especially in these tight economic times and with the holidays approaching.
An annual problem
This year’s number of returned tax checks is more than three times the number marked undeliverable last year. That increase is thanks to the economic stimulus payments, which were sent to taxpayers who met certain income requirements.
All these rebate-eligible filers had to do was file a 2007 tax return. But in 279,000 cases, the addresses on those 1040 forms were incorrect.
In many cases, the taxpayers moved after filing their returns and didn’t let the IRS know their new addresses. In some cases, though, the addresses on the forms were illegible, so they bounced back to Uncle Sam.
The same problems showed up on another 104,000 or so returns filed by taxpayers who are due regular tax refunds.
Whatever the reason and whichever tax payment is involved, the IRS has money that could be yours.
"People across the country are missing tax refunds and stimulus checks. We want to get this money into the hands of taxpayers where it belongs," IRS Commissioner Doug Shulman said in announcing the returned check problem. The tax chief added that as soon his staff gets the updated addresses, the checks will once again be on their way.
Nov. 28 tax rebate deadline
Getting that information to the IRS is relatively simple, especially if you use the online options provided by the IRS.
If it’s a rebate check you’re missing, head to the IRS’s "Where’s My Stimulus Payment?" online tracking tool. There you can check the status of your stimulus check and receive instructions on how to update your address. If you prefer, you can do the same by calling the IRS at (866) 234-2942.
Just make sure you go online or make the call by Nov. 28.
By law, the rebate checks must be sent out by Dec. 31. So the IRS has established the late-November address change cutoff date to ensure that it can update its records and meet the final mailing deadline.
Recovering a regular refund
If it’s a regular refund you’re awaiting, check the IRS’s popular "Where’s My Refund?" money tracker. You’ll need your Social Security number, filing status and the amount of refund shown on your 2007 return.
The online search option then will provide the status of your refund and, in some cases, provide instructions on how to resolve delivery problems. You’ll also be given instructions on how to update your address.
Again, you can check on your refund and update your personal information by calling the IRS, this time at (800) 829-1954.
If you can afford to wait for your refund money or are just too busy right now to be bothered with tracking down missing tax money, you can wait. Your unclaimed tax refund check will find you next filing season when you send in your 2008 return that lists your current, correct address.
Missed deadline means credit, not cash
With a rebate check, however, such procrastination could be costly. You must meet the Nov. 28 address update deadline to get your money this year.
True, if you don’t get the correct mailing information into the IRS by then, you’ll get another chance in 2008 at a stimulus payment.
But next year the stimulus payment will be in the form of a credit on your tax return, not a separate check as was sent out this year.
And changes in your income and tax situation this year could affect your stimulus amount.
For example, if you have a child that qualified on your 2007 return for the child tax credit, you were eligible for an extra $300. However, if that child in 2008 does not meet the tax credit requirements, you won’t get that added economic stimulus money on the return you file next year.
Also, keep in mind that although the stimulus payment was distributed in 2007 as a check, it actually is a tax credit. That means any amount of stimulus for which you qualify on a 2008 return will be accounted for against your tax liability.
This means, for example, if you qualify for a $600 economic stimulus amount on your 2008 return and owe $1,000 in taxes, that $600 will be used to reduce your tax bill. You will not get the $600 as a separate payment.
So if you haven’t received your stimulus check yet, contact the IRS, either via the online rebate tracking tool or by phone, as soon as possible. And definitely do so by the Nov. 28 deadline. That’s the only way you’ll get your rebate money this year.