A taxpayer becomes eligible for tax refunds when the amount of taxes paid is more than the tax liability. Tax refunds are also known as tax rebates. There may be several reasons for claiming tax refunds. This could include the need to change the filing status, report extra income, change exemptions, claim tax credits that have previously not been taken and claim additional dependents.
Things to Keep in Mind before Filing Tax Refunds
Here is what you need to bear in mind while filing tax refunds:
• You should state all the justifications for your refund claim. This is important because in case the IRS rejects your claim and you file a court suit, you will not be able to argue the case on the basis of the grounds that you have not mentioned in the refund claim.
• Your filing for a tax refund should include all supporting documentation. Without this, the IRS will reject your claim.
Time Limits for Tax Refunds
For a successful filing of tax refunds, certain time limits must be met. These are:
• The IRS will consider your claim only if the postmark on your mail is prior to the due date for filing tax refunds. This due date considers any extension to the filing date. This mailing rule applies to the US Postal Service as well as other IRS-designated private delivery services.
• A refund can be claimed within two years of paying your tax or within three years of filing your tax returns, whichever is later.
• If you file a joint return with your spouse whose refunds are being withheld by the IRS due to a debt, you get six years from the date of the IRS notice for the withheld tax refunds.
• You have seven years from the date of a debt or securities becoming worthless to file a claim based on this.
• If a taxpayer is physically or mentally impaired and hence unable to tackle financial dealings, the time limits are suspended. In order to be eligible for this, the period of impairment must be expected to last for at least a year. The time limits come in affect when an impaired person has an authorized guardian for handling his/her financial affairs.
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Under this new proposal ALL homebuyers would qualify, not just new or first-time homebuyers. While most agree that the current plan has been beneficial in supporting a housing recovery, many have complained that it didn’t reach as many potential homebuyers willing to buy.
In addition to expanding the ALL homebuyers, the new proposal would also eliminate the existing income qualifications. The current income qualifications have been seen as a roadblock to unleashing the full potential of the existing tax credit. To qualify for the full benefits under the current plan, single taxpayers mush have annual incomes under $75,000 and married couples mush have annual incomes of under $150,000.
Some have pushed for the expansion of the benefit to as high as $15,000. It appears to have bipartisan support, including that of Banking Committee chairman Chris Dodd, D-Conn.
Remember, the existing First-Time Homebuyer Tax Credit is set to expire 12/1/09. This means that you have to close the transaction for the home purchase on 11/30/09. Time is running out.
This is sure to be a top priority topic on K street in DC when they come back from Labor Day vacation as many fear the expiration of the current first time homebuyer program will jeopardize a housing recovery (or at least stabilization) that appears to be underway. As much as 40% of home purchase transactions in 2009 have been from first time homebuyers rushing to take advantage of the existing tax credit.
I need help to know the proximate time for my tax refund to be received. It’s my first time to file by mail.
How long could tax refund be recieved for first time filing in Ontario?
