In our last article, we discussed the best way to find out where your tax refund may be. With the April tax-filing deadline quickly approaching, SoCo Tax & Cloud Accounting understands how stressful it can be to wait on details about tax refunds. Due to the stress of tax season, there have been a number of common myths on social media that steer taxpayers in the wrong direction.
As we covered earlier, taxpayers can find out when they will be receiving their tax refund by using the “Where’s My Refund?” tool provided by the IRS. This can also be accessed through the IRS2Go app. The tool is updated every 24 hours, so it can be monitored once a day. As a reminder, the IRS issues nine out of 10 tax refunds in less than 21 days. Therefore, it is not necessary to contact the IRS about the status of a return unless it has been more than 21 days since the return was e-filed, more than six weeks since the return was mailed, or “Where’s My Refund?” informs the taxpayer to contact the IRS.
To further understand the status of a tax refund, SoCo Tax & Cloud Accounting has found some common myths, provided by the IRS.
Myth 1: A refund will be issued faster if the taxpayer calls the IRS or a tax professional
It is important to understand that calling the IRS is not the answer to all questions. They receive many calls per day, and it can actually make the waiting process more frustrating. We understand how one may be eager to receive their refund, which is why it is suggested to check the status of a refund online through the tools provided by the IRS. If you cannot access “Where’s My Refund?” due to lack of internet access, calling the automated refund hotline at 800-829-1954 may be helpful.
Myth 2: Ordering a tax transcript is a ‘secret way’ provides the refund date
The reality is, ordering a tax transcript does not provide taxpayers with information on the status of their tax refund. The transcript can be used for the following: to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation.
Myth 3: ‘Where’s My Refund?’ isn’t accurate because there’s no deposit date yet
Updates to “Where’s My Refund?” on both IRS.gov and the IRS2Go mobile app are only provided once a day. These updates typically take place overnight. While a majority of refunds are issued in less than 21 days, there are cases where it may take longer. Occasionally, some refunds require more review than others. Thus, there are cases where a taxpayer who filed later may receive their refund before someone who filed earlier because there’s more review required in this instance. If more information is needed by the IRS in order to process a return, the taxpayer will be contacted by mail.
Myth 4: ‘Where’s My Refund?’ must be wrong because the refund amount is less than expected
The IRS works diligently to provide the correct refund amount to each taxpayer. However, there are some factors that may cause a tax refund to be larger or smaller than expected. This can be due to the following: math errors, federal taxes that are established as delinquent, state taxes, child support, student loans, or a portion of the refund is being held by the IRS while it is under further review.
If there adjustments made, The IRS will mail the taxpayer a letter explaining the circumstances. A letter from the Department of Treasury’s Bureau of the Fiscal Service may also be received by some taxpayers if an adjustment was made to a refund that reduced and offset the expected total.
Myth 5: Receiving a refund this year means it is not necessary to adjust withholding for 2019
It is necessary for all taxpayers to plan annually. When it comes time to file 2019 tax returns, there should be no surprises. Thus, proper changes should be made now, so unexpected outcomes can be avoided. Adjusting withholding with an employer or increasing estimated or additional tax payments may be necessary to avoid these unexpected outcomes. It is important to check withholding every year, and it is also encouraged by the IRS to do a Paycheck Checkup. To do so, the IRS Withholding Calculator can be used. This helps taxpayers to understand whether the right amount is being withheld. For those in need of an adjustment, W-4s should be submitted to employers, along with Employee’s Withholding Allowance Certificate.
The SoCo team understands the stress of tax season. By keeping up with updates from the IRS, it is easier to minimize stress, and understand what can be done while waiting for a tax refund. Using the tools provided may help you to get the answers you need, and better prepare for the future.