Filing taxes can lead to past unclaimed returns, which can be used to pay off debt

By Angela Hawke on Mar 5th, 2010

One way consumers may be able to lower the amount of debt they have is by filing their taxes and getting a return.

However, the Internal Revenue Service reports that billions of dollars in tax returns went unclaimed in 2006 because people did not file returns. In all, 1.4 million people who did not file that year are missing out on a total of $1.3 billion.

"The IRS estimates that the median unclaimed refund for tax-year 2006 is $604," the agency said.

Some consumers may not have filed a return because they did not make enough money in order to be required to do so. Federal law allows people a three-year span to collect on past returns, and the last day that consumers may do this for 2006 is April 15, 2010.

If they do not do so, consumers will lose out on the money, which becomes the property of the U.S. Department of the Treasury.

Consumers who do bother to get their return, one thing they can use it for is to pay off debt. A recent report from TransUnion noted that average credit card debt declined 3.8 percent during the fourth quarter of last year when compared to the previous quarter.

More Money Management News

07-08-2010

Illinois announces sales tax holiday for back-to-school items

07-03-2010

Fed overdraft rules now in play

07-02-2010

Extension to unemployment benefits delayed

06-29-2010

Personal spending, savings see increases in May

06-26-2010

Obama: Reform will provide strongest consumer protections in U.S. history

06-21-2010

Half of high school graduates can't manage money

06-20-2010

Microsoft providing software to alert credit card debt information theft

06-13-2010

Using debit, credit card debt safely

05-30-2010

Purchases made with credit card debt have minimums through Vermont law

04-20-2010

Survey from Fed to look at consumer finances, debt

Related Resources