Taxpayers are fidgety, consistently tracking their tax refund status through the IRS’ Where’s My Refund tool for their awaited tax returns. Although most people will receive their tax returns within 21 days of filing electronically, the IRS advises that there may be delays due to pandemic-related backlogs.
There’s A Silver Lining For Taxpayers Who Are Still Waiting!
The IRS typically has 45 days to process all the tax returns and send the refunds after the filing deadlines. According to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, the IRS adds daily compounding interest.
Beginning in July, the IRS will begin paying 5% interest to individuals with delated tax returns beginning in July 2022, which is up a percentage point from the previous interest rate of 4% in April 2022. Keep in mind, that the accrued interest payments paid by the government are still taxable income.
Interest on late returns costs the federal government billions of dollars every year. According to a report released in April by the Government Accountability Office (GAO), the IRS has paid out about $14 billion in refund interest over the last seven fiscal years.
Ways To Get Your Refund Faster
If you’ve already filed your tax return, you wouldn’t be able to speed up the refund process. The most you could do is track your tax refund status by using the Where’s My Refund tool. Otherwise, the IRS will reach out and contact you if they need any additional information to process your return.
For individual taxpayers who haven’t filed yet, the IRS offers tips to speed up your tax refund:
1. Use E-Filing
File your taxes electronically for the quickest tax refund. With paper returns, IRS workers have to manually input information, so filing by paper can cause delays in processing your return.
2. Direct Deposit
The fastest way to receive your tax refund is to elect to have it deposited directly into your bank account.
3. Avoid Errors
Incorrect, missing, or incomplete information on your tax return can trigger a manual review and lead to processing delays, thus slowing your tax refund. The IRS urges taxpayers to gather all relevant tax documents and take these steps to avoid the most common return errors:
Use the Correct Filing Status. Accurately mark your status as single, married filing jointly, married filing separately, head of household, or qualified widow/widower.
Report All Taxable Income. Be sure to have all your income documents on hand before you file your return. Underreporting your taxable income can lead to penalties and interest, and the processing delays will mean delays in receiving your tax refund.
Double-Check Your Entries for Errors. Look for typos in your name, date of birth, Social Security number, and routing and account numbers.
Sign and Date Your Tax Return. If you don’t, your return could be marked incomplete and trigger a lengthier manual review process.
Resolve Your Tax Bills
If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.