Are you missing money? Uncashed checks, inactive bank accounts and undelivered bonds are returned to the state for safe keeping. But getting your money back is easier than you might think. 415 Group Partner Kathleen Krohn, CPA, explains how to search for unclaimed funds.
According to Credit Karma, over $40 BILLION of unclaimed property is currently being held by state governments. That's a staggering amount of money — enough to buy half of the National Football League franchises. Not included in that figure is property sitting with federal agencies and other organizations. So what exactly is unclaimed property and how do you find out if you have any? Here is what you need to know:
What is considered unclaimed property?
There are two main types of unclaimed property:
(1) IOUs. Money that is owed to you that you haven't claimed.
(2) Forgotten funds. Money sitting untouched in an account for an extended amount of time.
Specific types of unclaimed property include back wages, life insurance, pensions, tax refunds, bank accounts, money orders, gift certificates and security deposits. For example, many states require banks to turn over funds from checking accounts that have been dormant for over three years.
Tips for managing unclaimed property
- Search state and federal databases. Unfortunately, there is no master database to search for unclaimed property. There is a website called Missing Money endorsed by the National Association of Unclaimed Property Administrators (NAUPA) that can search most states at once, but each state maintains their own database. Be sure to check all states where you have been a resident. More information is provided online by the US government to help track down additional types of unclaimed property.
- Don't pay a company to search for you. Companies are willing to search for unclaimed property for you, but will charge a fee. All unclaimed property data is public information, so anything a search company can find, you can find as well. In most cases, it's best to conduct the search yourself.
- Watch out for scams. Be wary of any notices alerting you to unclaimed property that can be yours for a fee. Often times these scams will ask you to send them money with the promise of more money in return. The Federal Trade Commission (FTC) has some tips to help you spot an imposter.
- Take steps to avoid having your property become unclaimed. The best way to keep your property is to prevent it from becoming unclaimed in the first place. Some ways to do this is to actively manage bank accounts, notify companies when you move, close old accounts, and read all of your mail so you don't miss a claim notice.
- File your tax returns. Consider filing a tax return even if your income is below the requirements to file. Unclaimed refunds with the IRS usually happen when a tax return isn't filed with one of two situations: your employer withheld income tax from your wages or you qualify for a refundable portion of the Earned Income Tax Credit. The only way to know for sure is by filing a tax return for the year in question. If you have past tax returns to file, don't wait — overdue tax returns need to be filed within three years.
Any unclaimed property due to you is rightfully yours and should already be in your pocket. Perform regular searches to ensure that your funds aren't sitting in a government account.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
Say you're due a tax refund or an overpayment from your doctor's office, but you recently changed your address. If a company can't deliver a check to you, it becomes an unclaimed property, and by law the company must turn it over to the state after so many years.
It's a little hard to prevent these unclaimed funds from happening. But it's easy to find them. Everyone should check each year — particularly when they move or change their last name.
Last year, I found $12,000 in unclaimed funds for one of my clients. Money that she didn't know anything about. It's definitely worth a search. You never know what you might find out there. It takes very little time and doesn' cost anything to do.
Visit the Ohio Department of Commerce Division of Unclaimed Funds website, and enter your personal name or company name into the database. If you find your name, follow the instructions to prove your identity, and you'll get a check.
You do want to be aware of scams. Sometimes people will receive emails claiming to be looking out for their best interest. The emails ask for payment upfront to retrieve your funds. You never want to follow through with those things. This is a free service offered by the state.
If you're well-versed in the Internet, you can do this yourself. But if you have any questions or concerns, give your advisor at 415 Group a call. We can help you search for any unclaimed funds that you may be owed.