This year has proven to be quite a challenge for the IRS. Thanks to last-minute tax changes from lawmakers on Jan.1, the agency had to scurry to update its forms and systems so taxpayers could accurately file their returns on time. It was a long process; in fact, it wasn’t until the first week of March that electronic filing was in place for all taxpayers.
But there’s no time for the IRS to take a breather, it now must process the avalanche of returns, and it could be a while before you get your refund.
Generally speaking, 9 out of 10 refunds are issued within 21 days of receiving the tax return, according to the IRS . Generally, there are two reasons for a longer processing time: an error made when preparing your taxes or if your return is pulled for review. It could also take longer if your return contains Form 8379 Injured Spouse Allocation, or if you claimed the Earned Income Credit (EIC) but didn’t complete the due diligence Form 8867 Paid Preparer’s Earned Income Credit Checklist.
You can check the status of your refund by going to Where's My Refund, or you can use the IRS mobile app IRS2Go. To track the return, you will need your Social Security number, filing status and the amount of your expected refund. If you electronically filed your tax return you can begin getting status updates after 24 hours from submission. This portal is updated every 24 hours and does not contain information on prior year tax returns or amended income tax returns-- it can only contains information on your 2012 tax return.
According to the IRS, the Where’s My Refund? button has a new feature this year that tracks your return and refund in three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent. You will get personalized refund information based on the processing of your tax return. The tool will provide an actual refund date as soon as the IRS processes your tax return and approves your refund.
Direct deposit of tax refunds is still the fastest way to get your money and you can choose to split the refund into a two bank accounts. A direct deposit is about five days faster than a mailed check.
Not everyone will get their expected return. Uncle Sam will withhold refunds for people who owe back taxes, back child support or student loan payments. The refund will be taken and applied to that debt.
If you are in Chapter 13 bankruptcy, the IRS will not take your refund unless you owe for back taxes or you have not filed all of your previous income tax returns. The IRS will send your refund to the Chapter 13 Trustee unless it elects to offset a pre-petition refund.
Be wary of tax professionals who claim a faster refund if you hire them to file for you. In fact here’s what the IRS says about that:
“Reminder Any claims by Providers concerning faster refunds by virtue of electronic filing must be consistent with the language in official IRS publications. Per the advertising standards in Publication 3112, IRS e-file Application and Participation, and Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, providers must not use improper or misleading advertising in relation to IRS e-file, including the time frames for refunds or other financial products. This reminder serves as the IRS’s request to the tax preparation community to follow these messaging guidelines. The IRS will monitor Industry practice during filing season, but anticipates and expects voluntary compliance from its partners in support of this important effort to help taxpayers understand their refund status.”
Bonnie Lee is an Enrolled Agent admitted to practice and representing taxpayers in all 50 states at all levels within the Internal Revenue Service. She is the owner of Taxpertise in Sonoma, Calif., and the author of Entrepreneur Press book, “Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn't Want You to Know.” Her new e-book Taxpertise for the Creative Mind Murder, Mayem, Romance, Comedy and Tax Tips for Artists of all Kinds is available at all major booksellers. Follow Bonnie Lee on Twitter at BLTaxpertise and at Facebook.