There are almost 96,000 people out there who could have an extra $1,000 lining their pockets if they only called up the Internal Revenue Service and asked for their money. This is not an Internet scam, I promise.
Thousands of refunds get returned to the IRS every year because the taxpayer moved, changed his or her name, wrote the wrong address on the return, or had a barking dog that intimidated the mail carrier. OK, I made that last one up. But I'm not making up the fact that the average refund due a taxpayer whose check got sent back to the IRS as undeliverable stands at $963.
If you're plumbing the recesses of your mind trying to remember whether you got the refund due to you this year, you can go to the IRS website and find out whether you've somehow missed out. The National Taxpayers Union has also put together a handy database that's simpler to use. And if you need more information, check out this IRS notice.
Alas, I have no missing tax refund to collect. But the prospect of an unexpected windfall got me thinking about all the other sources of free money that we may be overlooking every day.
- Your employer's 401(k) match: Repeat after me, "I will contribute enough money to my 401(k) retirement account to get the maximum company match." Say it over and over until you're dreaming about contribution forms. If you're not saving enough in your workplace retirement account to get the most from your employer's contribution, you might as well be discarding $100 bills in the street.
- Flexible spending accounts: If you spend money on health or child care, find out if your employer offers one of these. You can get some of your tax money back by using one, and who couldn't use a little help with the dental and day-care bills? You'll pay the expenses up front, but you'll get reimbursed with dollars set aside from your paycheck before taxes. That's a nice little discount on what could be some big expenses.
- Interest: You may quibble with my description of bank interest as free money, but it sure seems free to me. After all, once you put your money in an interest-bearing account, you don't have to do anything to make the balance increase. If you have a chunk of savings in a no-interest or very low-interest account, look around for something that will pay better. For example, some banks offer online savings accounts with higher interest rates.
- Dividends: Like interest, stocks that pay dividends are another great source of free money. The Motley Fool Income Investor newsletter can get you started down this road, and you can even try it for free.
- College 529 savings accounts: If you have children that you hope will be headed for the ivy-covered halls of academia, a 529 savings account offers a nice free money perk. The earnings on your money grow tax-free as long as you use the funds for school expenses. Not too shabby, and you'll need a lot of money (free or otherwise) to get the little ones through school.
- Roth IRA: Tax-free earnings can also be had through the Roth IRA. Unlike some other retirement vehicles, you pay tax on the money before you deposit to a Roth IRA account. But when it comes time to withdraw, it's all yours tax-free as long as you follow the rules.
- Coupons and rebates: The humble coupon, clipped from a newspaper, is a currency still accepted at grocery stores nationwide. On the Internet, you can find coupons of all stripes, not to mention promotional codes that work like electronic coupons. If you're a brand-loyal shopper, hunt around for some coupons. See if you can get your Internet shopping discounted, too.
And you thought free money was hard to find? If you're looking for more, the Motley Fool has a lot more information about banking, savings, college costs, and IRAs that will help you sniff out the scent of a free money trail.
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