Deadline Nears for Filing 2007 Tax Returns

While most American taxpayers are concentrating on filing their 2010 Federal Income Tax Returns, the Internal Revenue Service estimates that more than one million Americans should be worried about their 2007 income tax returns.

There is a three-year limitation on requesting an income tax refund. The clock starts ticking on the filing deadline for that year.

As a result, it is estimated that 1.1 million workers will lose out on an estimated $1.1 billion in income tax refunds if they do not file their 2007 federal income tax returns by April 18, 2011. April 18 is the three-year deadline for filing a federal income tax return for 2007.

The 2011 deadline is extended to April 18 due to the fact that the normal April 15 deadline falls on Emancipation Day , a holiday in Washington DC, this year.

The IRS estimates that more than half of these unclaimed tax refunds would most likely garner a refund check of at least $640 each, but that figure could be much greater for some taxpayers.

Income tax refunds are usually due to an overpayment of one's tax liability through estimated tax payments or income tax withholding from paychecks. In some cases, taxpayers may be due refundable credits, such as the Earned Income Credit, even if they paid in no income tax or had no withholding.

Many taxpayers, especially those in lower income brackets, do not file income tax returns because they do not owe any taxes. This can be a costly mistake.

In all cases, a tax return must be filed in order to collect a refund.

Taxpayers must file a return by the April 18 deadline in order to receive credit for any tax refund due; however, that does not mean they will necessarily receive a check.

If the taxpayer has not filed a 2008 or 2009 return, the IRS will hold the refund until all subsequent returns have been filed to ensure that no other tax liability is still owed. In addition, if the taxpayer owes back taxes or child support, the refund will first be applied to those accounts.

Should all other liabilities be met, a check could be in the mail in a matter of weeks. After the deadline passes, any unclaimed refunds will be deposited to the U.S. Treasury and are lost forever to the taxpayer.

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