You May Face A Delay If You Claim These Tax Credits
There are a couple of issues that could cause delays, even if you do everything correctly.
The IRS notes that it can’t issue a refund that involves the Earned Income Tax Credit or the Child Tax Credit before mid-February. “The law provides this additional time to help the IRS stop fraudulent refunds from being issued,” the agency said this week.
That means if you file as soon as possible on January 24, you still might not receive a refund within the 21-day time frame if your tax return involves either of those tax credits. In fact, the IRS is informing those who claim these credits that they will most likely receive their refunds in early March, assuming they filed their returns on January 24 or close to that date.
The reason relates to a 2015 law that slows refunds for people who claim these credits, which was designed as a measure to combat fraudsters who rely on identity theft to grab taxpayer’s refunds.
With reporting by the Associated Press.
Average Tax Refund By Income
There’s a clear correlation between income and tax refund amounts. Filers who have higher incomes get more back. This average tax return by income chart will give you the details:
Americans who earn $200,000 and over experience a much higher tax return than those who earn less because high earners generally have more cash withheld from their income over the course of the year.
For a more detailed look at the average tax refund across income levels, see the table below.
A more detailed breakdown reveals that tax refund amounts and incomes are related but anomalies exist.
Filers with no adjusted gross income posted an average tax refund of $2,132, which is more than or close to the average returns for most income bands up to those who earn $200,00 or more. Filers with no AGI or negative AGI aren’t necessarily earning no income. It’s more likely that they’re taking advantage of tax deductions.
Another departure — Americans that made $15,000 to $19,999 had a higher average refund than every subsequent group up to those making $200,000 or more. This isn’t a one-year quirk. Earners in the $15,000 to $19,999 band had a higher average tax return than every group up to those making $50,000 to $75,000 every tax year dating back to 2012. Even in years prior to 2012, those making between $15,000 and $24,999 tended to have higher or similar refund amounts to those making up to $74,999.
What Is A Tax Return
The purpose of a tax return is simple: It’s a series of forms that you fill out to show the government how much money you earned and how much you’ve already paid in taxes during the year.
Armed with this information, the IRS and your state government taxing bodies can determine if you’ve paid enough taxes throughout the year or if you owe the government more money. These bodies will also use your tax returns to determine if youre owed a refund.
If you are an hourly or salaried employee, your employer withholds a percentage of your pay every pay period to cover the taxes you owe the government. Depending on how much your employer withholds, you might end up paying too much in taxes during the year.
If this happens, you are due a refund. You overpaid throughout the year, so the government will pay you back the amount you overpaid.
You’ll have to file your state and federal tax returns once a year. Typically, you must mail your tax returns of the previous year by the end of day on April 15 of the current year. But if that day falls on a weekend or a federal holiday, Tax Day will be moved to the next business day.
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Looking For Information About Your Tax Refund
E-file and sign up for Direct Deposit to receive your refund faster, safer, and easier! You can check the status of your refund using IRS Wheres My Refund?
Not using e-file? You can still get all the benefits of Direct Deposit by getting your tax refund deposited into your account. Simply provide your banking information to the IRS at the time you are submitting your taxes.
Convenience, reliability and security. No more special trips to your institution to deposit your check a nice feature if you are busy, ill, away from home, located far from a branch or in a place where parking is hard to find. You no longer need to wait for your check to arrive in the mail. Your money will always be in your account on time. If you move without changing financial institutions, you will not have to wait for your check to catch up with you. You do not have to worry about lost, stolen or misplaced checks.
We issue most refunds in less than 21 calendar days.
Use the IRS2Go mobile app or the Wheres My Refund? tool. You can start checking on the status of your tax return within 24 hours after we have received your e-filed return or 4 weeks after you mail a paper return.
The Treasury Bureau of the Fiscal Service’s Kansas City Regional Financial Center will be disbursing all tax refund direct deposits on behalf of the IRS. Information in the ACH Batch Header Record can be used to identify an IRS tax refund, as follows:
Direct Deposit
Double Check Information Entered Into Tax Software
Many tax-filing services transpose information from tax forms to calculate your return, but you should still double check to make sure that the information received by the service matches what’s on your forms.
“One of the most common mistakes is not taking a moment to review the information you entered,” Mark Jaeger, vice president of tax development at TaxAct said.
Missing information or entering it incorrectly either through being rushed or disorganized can mean leaving benefits on the table. In that instance, the IRS won’t catch your mistake. “It is simply a mistaken concept that if you leave off a benefit the IRS will ‘find it and add it back and send you more money.’ Nothing could be farther from the truth,” said Steber.
Steber pointed out that there’s a growing trend of taxpayers making small but costly mistakes on their filings. “These mistakes have resulted in thousands of taxpayers seeing a delay in receiving their tax refund because their return is sent to the IRS’ error resolution system,” he said.
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Deadline Approaching To Claim State Tax Refunds Before They Move To Unclaimed Propertycontinue Reading
BATON ROUGE Thousands of Louisiana taxpayers have until Thursday, Oct. 6 to claim millions of dollars in state income tax refunds before the Louisiana Department of Revenue transfers them to the states Unclaimed Property fund.
In August, LDR sent Notice of Unclaimed Property letters to 20,400 individual and business taxpayers. So far, approximately 4,000 have responded to claim their refunds. The remaining approximately $9.5 million in funds will be transferred by law to the Unclaimed Property Division of the state treasurers office later this month if not claimed by Oct. 6.
If you received one of the letters but havent responded yet, simply complete and return the attached voucher to LDR. The department will issue paper checks to all taxpayers submitting completed vouchers by the Oct. 6 deadline.
Any refund not claimed by the deadline remains the property of the taxpayer, and can be retrieved from the Unclaimed Property Division.
Tax Return Filing Status
Youll also have to determine your filing status. This is important because it helps determine how much in income tax you’ll pay. You can file as:
- Single: You’ll file as a single taxpayer if you are not married and aren’t being claimed as a dependent on someone else’s tax returns. Single taxpayers are eligible for a standard deduction of $12,550 for the 2021 tax year.
- Most people who are married file in this category. This allows them to file one joint tax return. If you file under this category, your standard deduction for the 2021 tax year is $25,100.
- Married couples can also each file their own tax returns, reporting only their personal income, deductions and credits. The standard deduction for taxpayers who file this way is $12,550 for the 2021 tax year.
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Experts Say Tax Returns Could Be Delayed
Although the IRS says most refunds will be sent within 21 days, experts warn that delays are likely, noting that the agency is still working through 2020 tax returns.
During the 2020 budget year, the IRS processed more than 240 million tax returns and issued roughly $736 billion in refunds, including $268 billion in federal stimulus payments, according to the latest IRS data. Over that period roughly 60 million people called or visited an IRS office.
Donald Williamson, an accounting and taxation professor at American University in Washington, said he expects “weeks and weeks” of IRS delays in 2022. “My advice in 2022 is file early, get started tomorrow and try to put your taxes together with a qualified professional.”
Compounding the challenge, tax preparers told CBS MoneyWatch that it remains hard to reach IRS personnel on the phone. The IRS answered only about 1 in 9 taxpayer calls during fiscal year 2021, Collins reported. “Many taxpayers are not getting answers to their questions and are frustrated,” she noted.
“Back in the old days, you’d wait 5-10 minutes and get an IRS agent on the phone,” said Christian Cyr, a CPA and president and chief investment officer at Cyr Financial. But now, he said, his CPAs wait hours to speak with an IRS employee, with no guarantee of ever reaching one.
1. File electronically
2. Get a refund via direct deposit
3. Don’t guesstimate
4. Save IRS letters about stimulus, CTC
How Do I Get My Tax Refund
Luckily for you, the IRS is excellent about getting your tax refund to you.
In fact, you can check out the IRSs Wheres my refund? tool to find the status of your tax refund right now. And according to the IRS, they issue nine out of ten refunds back to the taxpayer within 21 days after they file their taxes.
Ultimately, though, how soon you get your refund back depends on two things:
- How you file your taxes
- How you elect to receive your refund
If you decide to file your taxes through good old fashioned pen and paper, its going to take considerably longer to get your refund back. In fact, youre going to have to wait four to six weeks before youre even able to check your status on their Wheres my refund? tool.
There is another route though: Electronic tax filings.
You receive your tax refund even faster when you file it electronically via platforms like TurboTax or IRS e-file. There you can elect to receive your refund through direct deposit . Its secure, fast, and the same way the government deposits millions of Social Security and Veteran Affairs benefits each year.
When you get your money back, be sure to put it to good use:
So you know how much youre getting back and how to get your money. Now lets get into what you might be getting WRONG about your tax refund.
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How To Get The The Largest Tax Refund In 2023
While it’s not possible to predict how the average refund will change in the 2022 filing year, we asked experts at major tax service providers about how to maximize tax refunds and what changes to watch out for. One common among the experts we talked to: parents are likely to see a smaller refund.
According to Kathy Pickering, chief tax officer at H& R Block, “It is safe to say the refunds will likely be smaller for taxpayers who claimed the Child Tax Credit and EIC in 2021. Now that these expanded credits have been reduced to their pre-COVID levels, refunds should be smaller.”
Tips For Maximizing Your Tax Savings
- Finding a qualified financial advisor doesnt have to be hard. SmartAssets free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If youre ready to find an advisor who can help you achieve your financial goals, get started now.
- When youre filing your taxes, a tax filing service can make things easier. They can take a lot of the confusion out of the process for you and help you file a more accurate tax return. They can also help you find deductions or exemptions that you wouldnt have known about on your own. Popular software choices include TurboTax and H& R Block.
- If you find that youre regularly receiving large tax refunds, this may mean that youre paying too much in taxes in the first place. In that case, you may want to adjust the withholding amounts on your W-4 so you can keep more money throughout the course of the year. Big refunds are exciting, but why give the IRS a free loan?
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Unclaimed Federal Tax Refunds
If you are eligible for a federal tax refund and dont file a return, then your refund will go unclaimed. Even if you aren’t required to file a return, it might benefit you to file if:
- Federal taxes were withheld from your pay
and/or
- You qualify for the Earned Income Tax Credit
You may not have filed a tax return because your wages were below the filing requirement. But you can still file a return within three years of the filing deadline to get your refund.
Get A Bigger Tax Refund: Consider Your Filing Status
Your filing status can have a significant impact on your tax refund, regardless of whether youre single or married. For most married couples, it makes sense to file jointly. However, there are some situations where you should consider filing separately.
For example, if you or your spouse has a significant amount of medical or business expenses, filing separately may reduce your adjusted gross income and increase the amount you can deduct . On the other hand, filing separately means you may miss out on some key tax credits. Run the numbers to see which filing status yields the bigger benefit. And if math isnt your forte, you can estimate your return easily with a free tax return calculator.
If youre single, you could look into whether you qualify for head of household status. Generally, you need to have paid more than half the cost of maintaining a household for yourself and a qualifying dependent over the course of the year. For tax purposes, this could mean a child or a dependent adult, including an aging parent. If youre able to file as a head of household it could give your refund a significant boost. For example, heads of household get a larger standard deduction than single filers.
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Why Do People Get Tax Refunds
You will get a refund if you overpaid your taxes the year before. This can happen if your employer withholds too much from your paychecks . If youre self-employed, you may get a refund if you overpaid your estimated quarterly taxes. Refundable tax credits, such as the EITC, can also lead to refunds.
Tax Refunds: When Will I Get My Tax Refund
By: Jack Caporal |Updated Nov. 18, 2022
Image source: Getty Images
Filing taxes isn’t anyone’s idea of a good time, but a tax refund is a light at the end of the tunnel. Considering the Internal Revenue Service refunded $293 billion in income tax in 2021, plenty of filers get a sizable return.
How long does it take to receive your tax refund? What’s the average tax refund amount? And do certain characteristics, such as income or marital status, influence tax refund amounts?
To find out, we analyzed the most recent IRS data on tax refunds. In the sections that follow, you’ll learn exactly which filers get the biggest refunds.
Jump To
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The Average Tax Refund Last Filing Season
The average tax return for the 2020 tax year was $2,827, a 13.24 percent increase from the previous year. Nearly 240.2 million returns were filed in 2021, amounting to $736.2 billion.
There have been 125.3 million refunds issued totaling $317.7 billion. Of the refunds, more than 102 million were direct-deposited.
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.
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Here’s How Long It Will Take To Get Your Tax Refund In 2022
Three in four Americans receive an annual tax refund from the IRS, which often is a family’s biggest check of the year. But with this tax season now in progress, taxpayers could see a repeat of last year’s snarls in processing, when more than 30 million taxpayers had their returns and refunds held up by the IRS.
Treasury Department officials warned in January that this year’s tax season will be a challenge with the IRS starting to process returns on January 24. That’s largely due to the IRS’ sizable backlog of returns from 2021. As of December 31, the agency had 6 million unprocessed individual returns a significant reduction from a backlog of 30 million in May, but far higher than the 1 million unprocessed returns that is more typical around the start of tax season.
That may make taxpayers nervous about delays in 2022, but most Americans should get their refunds within 21 days of filing, according to the IRS. And some taxpayers are already reporting receiving their refunds, according to posts on social media.
However, so far, the typical refund is about $2,300 less than the average refund check of about $2,800 received last year. That could change as the tax season progresses, given that tens of millions of Americans have yet to file. But it could signal that taxpayers could get smaller checks this year, an issue for households already struggling with high inflation.