Although few people would admit they look forward to tax season, most of them do appreciate receiving their tax refund. In general, taxpayers receive their refunds within three weeks of filing their tax return with the IRS. A delay in receiving that refund can be frustrating, especially if you’re not sure why the delay is happening.
This blog covers reasons why you may be experiencing a tax refund delay and, when possible, offers suggestions for making sure it doesn’t happen again.
It may seem incredibly basic, but with the number of forms to fill out, it can be easy to overlook a simple error, especially in a Social Security number. These types of errors can lead to delays in receiving your tax refund.
The easiest way to avoid this error is to carefully check that the names and Social Security numbers for you, your partner, and your dependents are correct on the forms before your turn them in. This applies not just to the forms you complete, but also to any forms you get from clients or employers such as W-2 forms and 1099 forms.
Although it’s not as likely to happen today due to the availability of so many e-file options, incorrect numbers are a big reason for tax refund delays. Manually prepared returns often have math errors and miscalculations. These include taxable income, Social Security income, credits, deductions, and estimated tax payment amounts.
Whether you’re doing your taxes yourself or taking them to a professional, math errors are completely avoidable. Double-check the numbers and use software to help file your taxes. This software is designed to plug the correct number into the correct box and calculate totals for you, saving you the time and heartache of not receiving your return on time for a completely avoidable reason.
Filing at the last minute
So many people wait until the last minute to file their taxes that it often creates a delay in processing the returns. This is especially true if you’re filing your form manually instead of using e-file. This problem is easy to rectify: file your taxes as soon as you have all the available forms to ensure you get your refund as fast as possible.
Delays in refunds for taxpayers claiming the EITC and ACTC
Beginning in 2017, the IRS began delaying refunds for all taxpayers who claimed the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit (ACTC) on their tax returns. If you claim one or both of these tax credits, your refund will automatically be delayed until the week of February 27, regardless of when you turned it in. This new regulation applies to your entire tax refund, not just the portion attributed to the specific credit you claim.
The IRS implemented this change in order to reduce fraud, identity theft, and inaccurate claims. By delaying these refunds, the IRS is able to verify a taxpayer’s income based on their employers’ W-2 forms before paying out the refund. Unfortunately, there is no way around this delay unless you choose not to claim either of these credits.
Incorrect Direct Deposit Information
When you file a return, you have the option of receiving your tax return via direct deposit, allowing the IRS to send your money directly to your bank account. If you enter the incorrect routing number and account number, your refund could be delayed by days, or even weeks. Be sure to double- and triple-check that you have entered the correct information before you push send.
If you discover you have to make a change to your return, filing an amended return will definitely delay your tax refund. First of all, amended returns cannot be e-filed and must be manually mailed in. Second, it takes eight to 12 weeks for the IRS to process an amended return, which clearly delays your refund considerably.
Once again, checking for errors in your return is paramount, especially if it prevents making the kind of mistake that would cause you to have to file an amended return.
Although there are some exceptions, most of the reasons your tax refund might be delayed are completely avoidable. By taking extra time to review your return for errors and inaccuracies before you send it in, you’ll prevent a tax refund delay and ensure you get your refund as quickly as possible.