Want your tax refund faster? Here's what to do
MIAMI - It's that time of year - again.
Millions of Americans are gathering their W2 forms, along with other income statements, in preparation for filing their 2022 federal tax return.
While some look with dread at doing their taxes because they fear they will owe the government, others don't mind because they know they will be getting a refund.
For those in the latter group, here are some tips to get it fast.
The Internal Revenue Service says it typically issues refunds within 21 calendar days of accepting your tax return, assuming there are no issues. (More on those in a minute.)
Tom O'Saben, director of tax content for the National Association of Tax Professionals, said some of his clients have received their refunds in as little as 10 days.
But in order for your money to be sent to you as soon as possible after you file your return, you'll want to do all of the following:
File your return electronically
Paper returns take the IRS longer to process - and can add weeks, if not months, to when you'll get your refund.
"If you filed on paper and are expecting a refund, it could take four weeks or more to process your return," the IRS notes on its website.
Elect to direct deposit your refund
You may instruct the IRS to deposit your money into one, two, or three of your financial accounts by filling out Form 8888.
For instance, you may choose to have a portion direct deposited into your checking account, another into savings and the remainder into an IRA account.
But avoid this time-consuming mistake: If you are married filing jointly, make sure the account(s) you select for direct deposit are jointly held with your spouse and not an individual account for either of you. Otherwise, the refund won't be deposited and goes "into limbo" until you can correct the situation, said enrolled agent Karla Dennis, founder and CEO of tax firm Karla Dennis & Associates.
"It happens all the time," she said.
In some cases, instead of a financial account, you may be able to have your refund deposited onto a prepaid debit card. But the FDIC urges filers to "read the fine print and make sure you know how to deposit money onto the card and any fees involved. Cards differ in the types of deposits allowed, the process for receiving government deposits, and the fees charged for certain transactions."
Make sure your return is accurate and complete
Your refund may be held up if your return contains a mismatch of the information that you provide with what the IRS has on file, simple mistakes or typos, math errors on your part, or if it is missing documents - all of which are avoidable if you take care to double check everything before filing.
For instance, the IRS will not accept your return if its system finds a mismatch between your Social Security number and the first four letters of your last name, O'Saben said.
This can be an issue if you got married recently and changed your last name but failed to inform the Social Security Administration of your name change.
If you had a baby in the past year, be sure to spell the child's last name exactly as it is spelled on their Social Security card, O'Saben said. Sometimes the hospital where the baby was born may have made a mistake in the papers it provided you.
If you're claiming tax credits and deductions for something like child care, Dennis said, be sure to include not only your and your dependents' correct Social Security numbers but also the correct identifying numbers of your child care provider - which typically would be a Social Security number if it's an individual or an Employer Identification Number if it's a business like a day care.
Another case where your return will be rejected from the get-go is if you got your health insurance on healthcare.gov and qualified for premium tax credits but fail to include Form 8962 with your return, O'Saben noted.
If you fail to report all the income you earned, including related documentation, the IRS may process your return and issue you a refund within 21 days, only to send you a letter in a few months noting the discrepancies, O'Saben said. If the IRS finds you still owe tax on that unreported income, you may have to return some or all of your refund, plus interest, and possibly an underpayment penalty.
The story may be a bit different if you're reporting business income on your return. Dennis said that lately, especially with sole proprietors whose income is reported primarily on 1099-NEC forms, she has noticed that the IRS has been much quicker to flag discrepancies in income reporting and is more likely to hold up refunds rather than accept and process someone's return.
"The IRS seems to be putting in more checkpoints to slow their wheels, if you will," Dennis said.
The IRS created an online tool - Where's My Refund? - to help you keep track of your refund after submitting your return.
