Aside from having to fill out a tax return, the most annoying thing for most people each year is waiting for their tax refunds. The complaint is continually atop the list of taxpayer complaints.
The frustration of waiting for the Internal Revenue Service to deliver their tax cash probably is why so many folks fall for tax refund myths.
Don't! These fabrications, six of which are listed below, won't help you get your money any sooner, and some could actually cost you more.
Myth 1: Calling my tax professional or the Internal Revenue Service will get me my refund sooner.
There are lots of good reasons to use a tax professional rather than doing your taxes yourself. It is a myth, however, that bugging your tax preparer, or the IRS itself, will get your refund to you more quickly.
In fact, being a pest could backfire.
Your tax preparer has done his/her best job for you. If you continue to bother him/her after your return is in the IRS' hands, you're likely to get on the tax pro's troublesome client list. That doesn't mean the tax preparer will provide less than professional service. But it does mean your tax pro isn't likely to go beyond that to help. If you're a persistent post-filing pest, you might even find yourself being fired.
The IRS can't do anything for taxpayers who are simply waiting for refunds either. Once your Form 1040 is in the agency's system, it's just got to work its way through.
The IRS says the best way to check the status of a refund is to use its online Where’s My Refund? tracking tool. If you're away from your laptop or PC, then use your digital device to check on your refund via the IRS2Go mobile app.
But don't go crazy with the checking. The IRS updates the status of refunds once a day, usually overnight. Checking either status option more than once a day will not produce new information.
And no, trying to connect with a real person at the IRS won't get you any additional info. Plus, you'll be on hold for a while until a representative answers. So leave the IRS phone help line staff alone. Call only if the refund status tool or app instructs you to do so.
No electronic connections available? Then call the IRS; automated toll-free refund hotline at (800) 829-1954. It has the same information as the Where's My Refund? app.
Myth 2: The Taxpayer Advocate Service can help me get my refund sooner.
The Taxpayer Advocate Service (TAS) can do a lot of things to help a lot of taxpayers who have issues with the Internal Revenue Service. However, the TAS is not a miracle agency.
It can't take just any IRS-related problem and solve it to affected taxpayers' complete satisfaction. It only gets involved in certain taxpayer/IRS situations. And a regular slow refund is not one of them. Check out my earlier post on when the Taxpayer Advocate Service can, and can't, help.
Myth 3: Ordering a tax transcript a "secret way" to get your refund sooner.
We all love special life hacks that help up do things more quickly or make tasks easier. The same is true when it comes to taxes.
But as far as your tax refund, ordering a tax transcript will not help you get your tax cash any sooner or tell you exactly when you'll get your refund. It's unclear how this myth got started since, notes the IRS, the information on a transcript does not necessarily reflect the amount or timing of a refund.
Rather, tax transcripts generally are used to validate past income and tax filing status. This information is required, for example, when you're seeking a mortgage, student or small business loan.
You also might need a transcript's prior year tax data to help with your current tax return preparation or to file an amended return.
But a transcript will not tell you when your pending refund will be issued. And it definitely won't jump start the refund's issuance.
Myth 4: Where's My Refund? must be wrong because it's not giving me a deposit date.
The IRS says that even in this extraordinary COVID-19 affected tax season, it still is issuing most refunds due taxpayers who filed electronically in 21 days or less. (If you submit a paper return, that turnaround is six weeks.)
Unfortunately, some of us don't fall into that "most" category. It's possible our refund might take longer.
This typically happens if the IRS finds an error on your return and is correcting it. Or the tax agency might need more information from you to finish processing your 1040. Or the IRS might have a tax fraud concern about your filing.
All of these circumstances could slow down your return's processing, delaying the issuance of your refund. Until these situations are cleared up, Where's My Refund? won't be able to provide an expected refund delivery date.
Then there's this infernal coronavirus-affected tax season. The problems the pandemic created last year are still with us and the IRS.
The tax agency is still digging out of backlogs created in 2020 when it had to shut down most of its campuses due to health protocols. Earlier this year, the IRS admitted that it was IRS still processing almost 7 million 2019 tax year returns.
The 2020 return situation this year isn't much better. The IRS now is holding more than 29 million returns that is says must be processed by hand.
Just hang in there. We'll get through this eventually. And continue checking — but only once a day! — the IRS' online tracker for your refund's status.
Myth 5: Where's My Refund? must be wrong because it says my refund is less than expected.
Despite a tax preparer's expertise or the careful attention paid to tax preparation software, sometimes the amount that shows up on your return's refund amount line is not what you get.
There are several reasons your tax refund might be smaller than expected. Situations that could decrease a refund include:
- The return has math errors or other mistakes.
- The taxpayer owes federal taxes for a prior year.
- The taxpayer owes state taxes, child support, student loans or other delinquent federal non-tax obligations.
- The IRS holds a portion of the refund while it reviews an item claimed on the return.
If your return falls into one of these situations, the IRS typically will mail you a letter — yes, a written document sent through the U.S. Postal Service — explaining any adjustments or reductions it made.
Some taxpayers also may get a letter, again snail mailed, from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.
Myth 6: Getting a refund means you don't need to review, and possibly adjust, your payroll withholding for the 2021 tax year.
Whether you intentionally took steps to get a refund or it was a surprise when you finished your Form 1040, you should look at your current payroll withholding amount.
Conventional tax wisdom is that you want to have enough tax withheld from your paychecks to cover your coming tax obligation, but not so much that you get a big refund. Yes, intentional overwithholding is a sort of forced savings account, but you get absolutely no interest. And if you need the money before next filing season, you can't get to it.
Instead, consider changing your withholding so that you get more in each paycheck. If you're afraid you'll just blow the extra cash, set up a bank or credit union account and have the money that was going to Uncle Sam as withheld taxes automatically sent to that personal account.
That way, it won't show up for you to spend, but it will be accessible — at any time, not just in the usually spring tax filing season — if a financial emergency arises.
Adjusting your withholding also is important when there are major changes in your life that could affect your taxes. This includes marriage, divorce, birth or adoption of a child or a person no longer is your dependent.
The IRS' online Tax Withholding Estimator can help you determine the appropriate amount to have withheld from your pay.
If you've heard or hear any of these fallacious suggestions about how to speed up delivery of your tax refund, ignore them.
They don't work.
Sorry, but you're just going to have to wait, just a little longer, I hope, for your tax refund to arrive.
You also might find these items of interest:
- May Day! Mayday! Don't fall for these 5 COVID-19 relief payment myths
- Don't fall for these 13 tax myths on Friday the 13th or any other day of the year
- New Taxpayer Advocate highlights COVID-19 effects on the IRS and taxpayers in her first report
|Coronavirus Caveat & More Information
In 2021, we all still are dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.
But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.