These tax refund myths won't get you your money sooner
Thursday, March 23, 2023
Through March 10, the Internal Revenue Service had issued more than 49 million refunds, which came to a total of $146.2 billion.
If you're still waiting on your part of that, you're probably getting a bit frustrated. I get it. You want your cash.
At the very least, you want answers as to why it's taking so long for your tax refund to show up in your mailbox or bank account.
That frustration is why lots of folks every filing season fall for myths, misconceptions, and just plain wrong information they think will help speed up the delivery of their refunds.
Here are some refund myths that tend to show up every filing season, and why they won't help you get your money any sooner.
Nagging doesn't help. Don't tell the hubby I just typed that, but when it comes to tax refunds, it's true. For others things, well…. But to taxes.
Ever since the IRS created Where's My Refund?, it has urged taxpayers to use it to find their personal answers to the online tracking tool's question. But some folks think talking to the IRS or to their tax software provider or tax professional is the best way to find out when they will get their refund.
Not so, says the IRS. Stick with Where's My Refund?, either via your computer or the IRS2Go mobile app. If you prefer, or don't have internet service, you can call the IRS' automated toll-free refund hotline at (800) 829-1954 to get your refund status.
Bottom line, is don't call the IRS about your refund unless Where's My Refund?" tells you to do so. As for tax advisers, leave them alone. They've submitted your return; it's now out of their hands. They have no insider information that can get you a refund date or get you the money sooner.
Where's My Refund? must be wrong because it won't give me deposit date. The IRS updates Where's My Refund and the IRS2Go mobile once a day, usually overnight. You might have called between updates.
Also, notes the IRS, even though most tax refunds are issued within 21 days, it's possible a refund may take longer. The IRS could need more information to process a tax return, and in that case, it will notify you by U.S. Postal Service mail.
Where's My Refund? must be wrong because it says my refund is less than I figured on my return. The online tracking tool uses the data the IRS provides after it processes your return. That processing could find things that affect your refund.
There are many reasons why a tax refund might be less than expected. The obvious one is that you made a mistake, either in wrongly claiming a tax break or in doing the math on your Form 1040. Unpaid state and federal debts also could mean smaller refunds.
When the IRS makes adjustments to your return and associated refund, it will mail you an explanation letter. That could be in the mail while you're checking Where's My Refund?
Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.
So, again, don't call the IRS just yet. A letter should be on the way to help you understand any change that reduced your refund. It also will provide instructions on how, if needed, you should respond.
A tax transcript won't help. This misconception has been around a while, with people thinking that ordering a tax transcript will jumpstart their stalled refund. It won't.
A tax transcript simply is a general summary of your tax return or other tax-related information. And there actually are five types of transcripts. Whatever the transcript version, its information about your account does not necessarily reflect the amount or timing of your refund.
Rather, tax transcripts are more appropriately used to validate your past income and tax filing status to help you get a mortgage, student loan, or money to help start or run your small business. If you need a transcript for any of these purposes, you can request it online.
Transcripts also can help with the filing of a current return or amending of an older one when you need that previous tax information, but don't have your old 1040 on hand.
Getting a refund means you don't need to adjust your 2023 withholding. This myth is one too many people cling to beyond tax filings season. To avoid a surprise next year, either owing Uncle Sam a lot or getting a ginormous refund, you should make withholding changes now. Or any time during the year where your financial or personal circumstances — unexpected windfall, new job, marriage, child, divorce — change.
The IRS' Tax Withholding Estimator online tool can help you determine the proper amount to come out of your paychecks. Use it to complete a new Form W-4 and give it to your payroll administrator.
Consider other timing factors. Finally, remember that the IRS 21-days-or-less direct deposit refund date is a goal, not a promise. Not to be flip, I know you want your tax money yesterday, but things happen.
Also, consider the time it takes for banks to post money to an account. While a U.S. Treasury transaction usually is pretty quick, it's not instantaneous.
And if you told the IRS to snail mail your refund check, then patience is of utmost importance. If your postal service is anything like mine — I use the post office's informed delivery app, and sometimes mail items show up days after it tells me they'll be in my curbside box — get ready to wait.
You also might find these items of interest:
- 6 things that could delay your tax refund
- Open a bank account to get your tax refund sooner
- IRS warns that tax refunds in 2023 might be smaller. Here are 3 reasons why
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