Federal tax return
Federal tax return is an important part of everyone's life. There are a few things that we can not escape. Death and federal tax return are the two of them.
In case you are planning to file a federal tax return, you will fall into one of the following scenarios. The first scenario when filling out federal tax return is that you will end up owing the government money. The second federal tax return scenario is that you will be awaiting your refund.
Federal tax return myth #1 - IRS will hold refund indefinitely
The first federal tax return myth is that you can postpone getting your federal tax refund for ever. Unfortunately the IRS will only hold your refund for three years.
The IRS retains an individual's refund for a period of three years. This federal tax return period starts on the due date of the return. After the three year statute expires, the refund is forfeited. The IRS is not a bank. The IRS does not hold people's money as long-term investments.
Federal tax return myth #2 - You will get refund if you owe
The truth is that if you owe the IRS anything, you will not get a refund that you calculated on your federal tax return. If you have a balance owing the IRS, your future refunds will be offset to that balance.
Federal tax return myth #3 - You are safe from other federal agencies
The oposite is the truth when it comes to your federal tax return. The IRS may offset your federal tax return refund to another Federal or State agency. The IRS partners with a number of States. Out of the 42 states that currently have an income tax, the IRS partners with most of them for the transferring and application of refunds toward delinquent debt. over 30 of the states have collateral agreements with the IRS to offset refunds. That means that your state refund may be applied to federal tax return debt.