How The Treasury Offset Program Works
Here’s how the Treasury Offset Program works:
If you owe more money than the payment you were going to receive, then TOP will send the entire amount to the other government agency. If you owe less, TOP will send the agency the amount you owed, and then send you the remaining balance.
Here’s an example: you were going to receive a $1,500 federal tax refund. But you are delinquent on a student loan and have $1,000 outstanding. TOP will deduct $1,000 from your tax refund and send it to the correct government agency. It will also send you a notice of its action, along with the remaining $500 that was due to you as a tax refund.
The Internal Revenue Service can help you understand more about tax refund offsets.
Each State Has Its Own Way Of Calculating Tax
Taxes are not the same in each state they are calculated differently. There are also states that apply no income tax, but they still have ways to collect money. There are 43 states that collect state income taxes. California, for instance, has the highest state income tax rate in the United States. Its tax sits at 13.3%.
Why You Get A State And Federal Tax Refund
There are different reasons why taxpayers get refunds, and in other cases owe money to the government. If you work for an employer, you were required to fill out a W-4 form when you were hired. On that form, you indicated the amount of taxes that needed to be withheld from each paycheck.
Taxpayers receive a refund at the end of the year when they have too much money withheld. If youre self-employed, you get a tax refund when you overpay your estimated taxes. While you might consider this extra income to be free money, its actually more like a loan that you made to the IRS without charging interest. Conversely, you will owe the government money if you underestimate the amount to taxes.
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Why Do I Owe State Taxes But Not Federal
Many taxpayers ask, how come I owe state tax but not federal? There’s a fundamental difference between federal and state income taxes. The former are collected by the federal government through the IRS and these taxes are then used to fund the various functions that come under the federal government. State income taxes are collected by individual states where the taxpayer may be living or have a business nexus in.
The withholdings and deductions made for your IRS federal tax liabilities may be more than enough to cover them all. In that case, you would be eligible for a federal tax refund. Even with your federal taxes paid, you still might meet the threshold at which your state starts charging tax. So even if you dont owe federal taxes to the IRS, you may still owe the state at the end of the year.
Do College Students Get All Federal And State Taxes Back
Each taxpayer has a personal exemption, worth $3,900 for 2013. If you can not be claimedas a dependent, you get your personal exemption. If you can be claimed as adependent, then the person claiming you gets your personal exemption.Each filing status has an associated Standard Deduction. That is a deductionfrom income that you get without having to keep records to prove.You tax is figured as follows:add up all of your income and subtract any adjustments . The result is called your Adjusted GrossIncome.next your exemptions are subtracted. If you are claimed as a dependent, thenyour exemption is 0.next, your standard deduction is subtracted
StandardDeduction
Taxpayerunder 65, not claimed as a dependent
$6.100for Single
$12,200for Married Filing Jointly, or Qualifying Widow with dependent child
$8,950for Head of Household
For over65 or blind, add $1,200 for each instance or add
$1,500each instance if single and not a surviving spouse.
Ifyou are claimed as a dependent, then your standard deduction calculation is abit involved, but for W-2 wages, the maximum amount is $6,100.
Now thatyour exemption and standard deduction have been subtracted, what isleft is called your Taxable Income.
To findthe tax on that amount, you look it up in the IRS Tax Tables
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Where Is My Tax Refund
Once you file your taxes, you may be concerned about when your tax refund will arrive. Thankfully, the IRS has a tool on their website that can clear up your anxiety.
After you click on the Wheres My Refund link, enter your refund amount, your filing status and either your Social Security number or your individual taxpayer identification number. Then youll know whether your federal tax refund is on the way or theres some problem that needs to be addressed. Its that easy.
An app called IRS2Go provides another way to check your refund status. And if youd rather use your phone to find out where your money is, you can call up the IRS Refund Hotline . Note, though, that the IRS receives high call volumes.
Its possible that your refund really is missing, especially if youve recently moved. After youve updated your address online, the IRS can send you a replacement check.
Finding the status of your state tax refund might take a little longer. Youll have to visit the website for your states Department of Revenue. Many states have their own Wheres My Refund tool but some require you to register before you can figure out where your refund is.
Free Tax Help Is Available
The IRS Volunteer Income Tax Assistance Program generally offers free tax help to people who make $57,000 or less. The IRS also offers tax help for seniors through its Tax Counseling for the Elderly program . There are VITA and TCE sites across the state where trained volunteers can answer your questions, file your taxes and help you take advantage of any tax credits for which you are eligible.
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The Tax Refund Process
You can request a tax refund from the government by filing an annual tax return. This document reports how much money you earned, expenses, and other important tax information. And it will help you to calculate how many taxes you owe, schedule tax payments, and request a refund when you have overpaid.
Once the government gets your tax return and processes your information, it officially approves you for a refund before sending off your money. Tax refund processing varies depending on the way that you file your taxes.
Refunds for tax returns filed electronically are generally sent out less than 21 days after the IRS receives your information, though they can take up to 12 weeks to show up. Refunds for tax returns filed on paper often arrive between six and eight weeks.
You could be wondering, why does my tax refund take so long to show up?
Delays can happen as a result of mistakes, budget cuts and overwhelmed tax preparers. The timelines that the IRS provides are only estimates, so its probably not a good idea to count on using a refund to make an important payment or purchase. In some cases, you might be tempted to take out a refund anticipation loan. Sure, youll get your money earlier. But as a consequence, you may have to pay a hefty fee and interest.
When Are Taxes Due
For most years, the deadline to submit your tax return and pay your tax bill is April 15. However, taxes for 2021 were required to be filed by April 18, 2022, due to a legal holiday in Washington D.C. Residents of Massachusetts and Maine had until April 19, 2022.
For those that were unable to meet the tax filing deadline for the year, there was an option to file for a six-month extension. This would put your extension deadline to file your taxes at October 17, 2o22, but the sooner you file, the sooner you can receive your tax refund.
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Requesting A Duplicate 1099
If you do not receive your Form 1099-G by February 1, and you received unemployment benefits during the prior calendar year, you may request a duplicate 1099-G form by phone:
We cannot process requests for duplicate 1099-G forms until after February 1 because throughout January we are still mailing the original forms.
You do not need a paper copy of Form 1099-G to file your federal tax return the IRS only needs the total amount of benefits TWC paid you during the previous calendar year and the amount of taxes withheld.
Calculating Taxable Income Using Exemptions And Deductions
Of course, calculating how much you owe in taxes is not quite that simple. For starters, federal tax rates apply only to taxable income. This is different than your total income, otherwise known as gross income. Taxable income is always lower than gross income since the U.S. allows taxpayers to deduct certain income from their gross income to determine taxable income.
To calculate taxable income, you begin by making certain adjustments from gross income to arrive at adjusted gross income . Once you have calculated adjusted gross income, you can subtract any deductions for which you qualify to arrive at taxable income.
Note that there are no longer personal exemptions at the federal level. Prior to 2018, taxpayers could claim a personal exemption, which lowered taxable income. The tax plan signed in late 2017 eliminated the personal exemption, though.
Deductions are somewhat more complicated. Many taxpayers claim the standard deduction, which varies depending on filing status, as shown in the table below.
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Whats Taking So Long To Receive Refunds
If you dont receive your refund in 21 days, your tax return might need further review. This may happen if your return was incomplete or incorrect. The IRS may send you instructions through the mail if it needs additional information in order to process your return.
You may also experience delays if you claimed the Earned Income Tax Credit or the Additional Child Tax Credit. Under the Protecting Americans from Tax Hikes Act of 2015, the IRS is required to hold tax returns for folks who claimed those credits until Feb. 15. If you claimed either of those tax breaks, a PATH Act message may appear when you use the Wheres My Refund? tool.
If you havent received your refund and youre becoming impatient, calling the IRS will likely not help. Its best to avoid contacting the IRS directly unless the Wheres My Refund? tool prompted you to do so or its been 21 days since you filed your tax return electronically .
State Stimulus Checks 202: See If Your State Is Mailing Out Payments This Month
Several states are issuing tax rebates and inflation relief payments in October and November.
Dan Avery
Writer
Dan is a writer on CNET’s How-To team. His byline has appeared in Newsweek, NBC News, The New York Times, Architectural Digest, The Daily Mail and elsewhere. He is a crossword junkie and is interested in the intersection of tech and marginalized communities.
While the federal government is unlikely to issue another stimulus check, state governments are continuing to send taxpayers financial relief. Millions of California taxpayers started receiving a “middle-class tax refund” last week, with payments of up to $1,050 being sent out through January.
Other states are issuing one-time payments to help residents grapple with the bumpy economy: Colorado taxpayers have already started getting $750 tax refund checks, while eligible Virginians should receive a $250 rebate by Halloween, and Massachusetts will start disseminating tax rebates in November.
Is your state sending out tax refunds or stimulus checks? How much money could you get? Read on to find out.
For more on economic relief, check out plans for statewide child tax credits, as well as gas rebate checks and gas tax holidays across the US.
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Do Federal Income Taxes Differ By State
Federal income tax rates are based on your income and filing statusnot by where you live. Therefore, the same federal tax rates apply to everyone, no matter which state they live in. However, state taxes vary, so a taxpayer’s total tax liability will differ depending on where they live and earn income.
Why Do I Owe If I Didnt Owe Last Year
If you owe taxes that you didnt owe last year, it may be due to some changes in your life, such as:
Older Children A change that was made in the tax reform was the Child Tax Credit increase. It is $2,000 for children who qualify. Nevertheless, only children who were less than 17 years old at the end of the year will be able to claim the credit. Otherwise, you can only claim a $500 credit for the other dependents.
Job Changes Has there been any job change for you or your spouse? If so, a new Form W-4 should have been completed. If you made some changes in how you filed it, it may be why it affected your situation.
Side Job If you are a contract worker or freelancer, then you will have to pay quarterly taxes too. You will be responsible for keeping up with payments since you have no paycheck withholding. You may owe taxes to the IRS if you are a freelancer and you havent been paying the estimated quarterly taxes.
Income changes or students who were previously able to claim the American Opportunity Credit, yet became ineligible due to an enrollment status change may also affect the tax situation.
Filling Changes If you went through a divorce, marriage or you got a dependent, the filing status for which you are eligible and the way youre taxed can change. This might affect your tax bracket thats why you might owe taxes now.
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Start Tracking Right Away
Another myth is that theres no way to tell where your refund is until you get it and you’ll be asking ‘Where’s my refund?’ for a while. Reality: You can track your IRS refund status in fact, if you file using tax software or through a tax pro, you can start tracking your IRS refund status 24 hours after the IRS receives your return. If you’re thinking ‘Where’s my state refund?’ there’s good news: You can also track the status of your state tax refund by going to your state’s revenue and taxation website.
Will My Federal Or State Come First
We would not have a way to know that information. The IRS and your local state have separate refunding procedures and schedules, which means your refunds are processed separately and possibly at different times with each of them. So that means many people can get their state refund before getting the federal one or vice versa. Once your return has been successfully filed with TurboTax and your state and the IRS accept them, they handle the processing and your refunds. TurboTax doesn’t handle that.
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The Department Generally Processes Electronically Filed Returns Claiming A Refund Within 6 To 8 Weeks A Paper Return Received By The Department Takes 8 To 12 Weeks To Process
When inquiring about a refund, please allow sufficient time for the Department to process the refund claim.
The status of a refund is available electronically. A Social Security Number and the amount of the refund due are required to check on the status. You are not required to register to use this service.
If it is necessary to ask about a refund check, please allow enough time for the refund to be processed before calling the Department. Keep a copy of the tax return available when checking on the refund status online or by telephone.
Refer to the processing times below to determine when you should be able to view the status of your refund.
- For electronically filed returns, please wait up to 8 weeks before calling the Department. Electronically filed returns claiming a refund are processed within 6 to 8 weeks.
- For paper returns or applications for a tax refund, please wait up to 12 weeks before calling the Department. Paper returns or applications for tax refunds are processed within 8 to 12 weeks.
If sufficient time has passed for your return to be processed, and you are still not able to review the status of your refund, you may:
- Access Taxpayer Access Point for additional information, or
- Contact us at 285-2996.
For refund requests prior to the most recent tax year, please complete form RPD 41071 located at and follow the instructions.
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Don’t Let Things Go Too Long
If you haven’t received your tax refund after at least 21 days of filing online or six weeks of mailing your paper return, go to a local IRS office or call the federal agency . But that wont fast-track your refund, according to the IRS. “Where’s my refund” will undoubtedly be a concern, but the thing to worry about here is refund theft. It isn’t corrected quickly, so you may be in for an even longer wait.
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Undelivered Federal Tax Refund Checks
Refund checks are mailed to your last known address. If you move without notifying the IRS or the U.S. Postal Service , your refund check may be returned to the IRS.
If you were expecting a federal tax refund and did not receive it, check the IRS’Wheres My Refund page. You’ll need to enter your Social Security number, filing status, and the exact whole dollar amount of your refund. You may be prompted to change your address online.
You can also to check on the status of your refund. Wait times to speak with a representative can be long. But, you can avoid waiting by using the automated phone system. Follow the message prompts when you call.
If you move, submit a Change of Address – Form 8822 to the IRS you should also submit a Change of Address to the USPS.