$10k Challenge: Get Your Fair Share of Back Taxes

I'm on a quest to raise an additional $10k this year in income -- extra income outside my regular job. The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.

I've already suggested ways I'm working on this $10k including the following:

• $10k Challenge: Turn in Tax Cheats

• $10k Challenge: Make $3K Turning Blood into Money

• $10k Challenge: Make Money at Auctions

• $10k Challenge: Maximize Your Investments

• $10k Challenge: Ask for a Raise

• $10k Challenge: Get Money Owed to You

• $10k Challenge: Sell Stuff You Own

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Turn Your Hobby into an Extra Income

Here's the next idea for consideration: get your fair share of back taxes owed by the IRS.

You may be thinking that there's not a whole lot of money in this. If so, you'd be wrong. There's currently $2.2 billion owed to 1.8 million Americans for the 2003 tax year alone. Here are the details:

Apparently, three years ago 1.8 million individuals decided they had better things to do than file their 2003 tax returns, even though they were due refunds. In total, more than $2.2 billion from that tax year is still sitting in the Internal Revenue Service account.

Taxpayers can still get their old refund checks, which the IRS says could be more than $700 for some folks. But the claim, via a 2003 Form 1040, must be made by April 17. After that, the federally allowed three-year window of opportunity from the original filing deadline, which was April 2004, closes forever, and Uncle Sam gets to keep the cash.

The IRS estimates that the median refund -- meaning half of the checks will be larger and half smaller -- is $611. Some of the money is likely owed to taxpayers in every state and the District of Columbia, as well as to residents of U.S. territories and military filers who didn't file returns that year.

Ok, the median may be $611, but simple math will tell you that the average refund is $1,222. So some people are due to get REALLY BIG refunds.

Think you wouldn't qualify? Being owed a refund isn't as unusual as you might imagine:

Despite the staggering amount, the IRS says that unclaimed refund money isn't that unusual.

Each year, some people don't file a return because they don't owe taxes. But without the documentation, these folks won't get any refunds they're due. The IRS doesn't send refunds unless it gets a Form 1040, 1040A or 1040EZ that details just how big the government's check should be.

For simplicity sake, let's say you're owed $1,000 for taxes filed in 2003. And another $1,000 for 2004. And another $1,000 for 2005. That starts to add up to some serious money (30% of our annual $10k goal.) And even if you "only" get $611, it's free money, isn't it?

Here's how you get your money:

If you think some of the refund stash is yours, you can download a 2003 Form 1040 from the IRS Web site. If you need an old 1040A or 1040EZ instead, you can find them at the agency's index of past-year forms. Be sure to check out the 2004 and 2005 documents if you didn't file a return for those years either. The IRS won't send you your 2003 cash unless you filed in subsequent years.

Comments

[Atticus]

My guess is that this does not apply to you or any of your readers.