What is a tax refund? A tax refund is basically a refund from the IRS because you paid more in taxes than you owed. This can happen too much money is withheld from your paychecks (called withholding tax) and it adds up to more than your tax liability for the year.
You can control your tax refund amount by managing your withholding tax properly.
In general, the more money that is withheld from your wages throughout the year, the greater your tax refund may be because you’ve essentially overpaid the IRS. While everyone likes to get a tax refund, you should keep in mind that you’re only getting back the money you earned that year. A tax refund is basically an interest-free loan that you gave to the IRS!
On the other hand, if too little is withheld from your wages, you will likely owe more tax at the end of the year because you have underpaid the IRS. Additionally, you may be subject to penalties and interest charges for under-withholding.
For most taxpayers, it’s recommended that you try to match your withholding tax as close to your actual tax liability as possible. While you cannot avoid withholding tax altogether, you can control the amount that is withheld from each paycheck when you fill out your W-4 form.
WAYS TO GET A TAX REFUND
There are many taxpayers who, after filing their returns, ask “where’s my refund?” only to find out that they aren’t eligible for a refund. A tax refund is issued when the amount of income tax that you paid is more than what you actually owed for that year.
Of course, everyone wants to get a tax refund. And while a refund is never guaranteed, there are some things you can do to better your chances of receiving a check from the IRS. The following tips can help you increase the odds of getting a tax refund and avoid confusion over the “where’s my refund” question.
Plan Ahead
Don’t wait until the last minute to prepare your taxes and file your return. If you’re pressed for time and you rush through the filing process, you could end up making mistakes that cost you your refund. Additionally, taxpayers who submit their returns on the April 15th deadline should be prepared for a longer wait. The longer you wait to file, the longer it will take the IRS to process your return and you may be left wondering “where’s my refund?”
Check What You’re Withholding
Make sure you are withholding enough on your Form W-4 (Federal Employee’s Withholding Allowance Certificate) as well as from your state taxes during the year. Although it sounds simple enough, many taxpayers overlook this factor and just end up asking “where’s my refund?” Whether you work for a company or you’re self-employed, you are in charge of paying your taxes as the year goes by. Form W-2 employees may want to adjust their withholding if they have owed additional money in the past, but would like to get a refund the next year. Those who are self-employed should concentrate on calculating and remitting their estimated tax payments.
While under-withholding can leave you with little (or no) refund, over-withholding can be detrimental as well. Over-withholding taxes to receive a large refund is not recommended since you’re basically recovering money that you could have been using (and earning interest on) during the year.
Claim Tax Benefits
Take advantage of any tax credits and/or tax deductions that you’re eligible for. If you don’t claim the available benefits, you will end up paying more taxes than necessary. In turn, your chance of receiving a refund will decrease ― or even disappear. You don’t want to ask “where’s my refund?” and then discover that you’re not getting one.
Maximize IRA contributions
You have until April 15th (of the year in which you are filing) to make contributions to your Individual Retirement Arrangement (IRA). For instance, any money that is contributed between April 16th 2010 and April 15th 2011 could help decrease your 2010 tax liability. It’s always a good idea to focus on lowering your tax liability to keep more money in your pocket.
Hire a Professional
For many people, filing an income tax return can be complicated and confusing. Hiring a tax professional can ease your mind and increase your chance of receiving a refund. A tax pro can help you understand how to decrease your tax liability within the limits of the tax code. However, once your return has been filed, the tax professional isn’t going to know where your refund is. Instead, you will need to contact the IRS or use their online Where’s My Refund? system, which allows taxpayers to log-in and check the status of their refunds.
In addition, the method you used to file your tax return can have an impact on the “where’s my refund” question. If you filed electronically (“e-filed”) and chose the Direct Deposit option, you can expect your tax refund within 10 business days after the IRS acknowledges receipt your return. On the other hand, if you mailed in your tax return and you’re requesting a paper check, you may have to wait up to 6 weeks.
THINGS THAT CAN DELAY A TAX REFUND
Receiving a tax refund is a great joy for many people, but this anticipated excitement can turn sour if your refund is delayed. There are many factors that can contribute to a delayed tax refund. Rather than wasting time and blindly asking “where’s my refund?” you should consider the potential reasons for the holdup.
Many taxpayers pondering the “where’s my refund” question do not realize that their tax return may be the problem. It there are any errors on your return, that will hinder your refund. Additionally, returns that are filed by paper and refunds that are requested by check generally take longer to process. Listed below are some of the most common reasons why your tax refund may be late.
You filed a paper tax return
There are many people who mail in their tax returns instead of filing electronically. While it won’t affect the amount of your refund, it will affect how long it takes the IRS to process your return. If you went to the Post Office to submit your tax return, you will likely have to wait 4 to 6 weeks before being able to ask “where’s my refund?” On the other hand, taxpayers who file electronically and choose the Direct Deposit option may receive their refunds in as little as 7 to 10 business days. As a result, most people who e-file their taxes are able to avoid frustration over the “where’s my refund” question.
There is misinformation on your tax return
If you’re wondering where your refund is, double-check to see if you omitted important information or make a mistake on your return. Any errors on your tax return will cause it to be processed slower ― or you may have to submit an amended return, delaying your refund even longer. Make sure that your personal information is correct and your calculations add up before submitting your return. Otherwise, you may have to contact the IRS to straighten it out.
There are mathematical errors on your tax return
Computation errors related to estimated tax payments, taxable income, or withholding can delay processing and leave you wondering “where’s my refund?” It is important to make certain that your tax return is 100% accurate and true. Every year, thousands of people make math mistakes on their returns, which makes it more difficult for the IRS to process their refunds.
You mailed your tax return to the wrong address
If you are mailing in your tax return, it is essential that you send it to the proper address or you may find yourself asking, “where’s my refund?” Remember that the IRS is a huge organization with multiple mailing addresses (depending on the type of form and the type of entity filing). Also note that your state tax return must be sent to your state’s revenue department, not the IRS.
There are many factors that can delay a tax refund. To avoid aggravation over the “where’s my refund” question, double-check your return for errors and consider filing electronically for faster processing. Additionally, the IRS has an online system (appropriately named Where’s My Refund?) that can help you determine the status of your refund and when you can expect to receive it.
HOW TO TRACK DOWN YOUR TAX REFUND
Every year, millions of taxpayers start to ask “Where’s my refund?” Often times, people try to find out where their refund is before the IRS has had a chance to process their tax return. While everybody wants to receive their tax refund as quickly as possible, that doesn’t always happen. Remember that you are not the only person waiting for a tax refund.
What method did you use to file your personal income tax return? How did you choose to receive your tax refund? The answers to these questions will help you solve the “where’s my refund” issue. If you filed electronically and chose Direct Deposit, you can expect your tax refund within 10 business days (after the IRS receives your return). On the other hand, if you mailed in your tax return and you’re requesting a paper check, it is going to take much longer. This information can help you decide when it is time to dig deeper into the status of your refund.
The IRS Has a “Where’s My Refund?” Online Tool
The IRS has an electronic system in place, called “Where’s My Refund – It’s Quick, Easy, and Secure.” This is an online tool that can help you determine the status of your tax refund without having to deal with anybody on the phone. The Where’s My Refund system also helps the IRS to reduce the number of phone calls they receive from confused taxpayers looking for their refunds.
If you filed electronically, you will receive information about your refund within 72 hours after the IRS acknowledges receipt of your e-filed tax return. If you file by paper mail, it will take the IRS longer to process your tax return and you will not able to use the Where’s My Refund system for at least 3 weeks. This is another reason why e-filing has become so common among taxpayers.
To use the Where’s My Refund system, you will need several key pieces of information from your personal income tax return ― this includes your filing status, Social Security Number, and the exact dollar amount of your tax refund. Without this information, you cannot use the Where’s My Refund system, and you will probably have to wait and hope that your refund arrives soon enough.
If your tax refund was returned to the IRS by the Post Office, you may be able to change your address using the Where’s My Refund system. It is very important to make sure that the IRS has your correct address on file, or the arrival of your refund will be delayed.
For taxpayers whose refunds were lost or stolen, they are not out of luck either. The IRS allows you to request a replacement check within 28 days after your original refund was mailed out. However, don’t jump the gun and assume that your check disappeared just because a few weeks have elapsed. Keep in mind that many others are trying to find out where their refunds are too, and the Post Office can get extremely busy during tax season.
