7 important facts about tax refunds in 2020
The tax filing season has officially begun: the IRS accepts tax returns for 2019, and the clock counts down to April 15th. If you are hoping for a full or quick federal tax refund this year or more next year, then Money Talks News invites you to find out some useful facts to help you.
1. Electronic filing and direct deposit will accelerate your return
According to the Internal Revenue Service (IRS), filing your tax return electronically and choosing a refund option by direct deposit into your bank account (instead of, for example, a check in the mail) are the best ways to speed up your tax refund.
Submitting electronic documents is also the best way to minimize errors, which in themselves can delay refunds. Here's what the IRS explains:
“Although the IRS issues most returns in less than 21 days, some tax returns require additional verification and more processing time than others. This may be necessary if the error return is incomplete or is associated with identity theft or fraud. The IRS will contact taxpayers by mail when additional information is required to process the return. ”
2. Early filing will help prevent fraud.
Advance submission of tax information does not allow criminals to use your data for their own benefit.
Fraudsters who receive your personal information may then file a tax return in your name:
“They use your name, address, social security number and other personal data to fill out and file a fake tax return. Then the scammers get a big refund. At the same time, the IRS rejects your actual return, because the agency believes that you have already submitted an application. ”
The sooner you submit a declaration in the season, the less time fraudsters will have to implement their scheme. But too soon should not be served.
3. Too hasty filing may delay tax refunds
Although it is more reasonable to file a tax return earlier, it is also undesirable to make this application too early.
The IRS recommends that you have all your 2019 tax documents, such as Form W-2, with you before submitting your tax return for 2019. This will help to avoid delays in the return of funds, as well as the need to submit a corrected refund later (processing the corrected data can take up to 16 weeks).
“Taxpayers need their W-2s to file accurate tax returns, as the form shows the employee's income and taxes for the year,” the IRS explains.
Employers were required to send copies of W-2 work forms and some 1099-MISC forms to the IRS before January 31, and taxpayers should also receive copies of these forms by the end of January.
If you do not receive your W-2 before the end of February, the IRS recommends contacting your employer: ask for a copy of the form and make sure your employer has your correct address.
4. Obtaining certain tax benefits may slow down the return
If you are requesting an Earned Income Tax Credit or Additional Child Tax Credit, the IRS will not issue you a refund until mid-February. This is required by law and applies to all refunds, and not just part of these tax benefits.
The IRS says they expect most of the returns related to any of these loans to be completed by the first week of March, provided that taxpayers choose a direct deposit and that they have no other problems.
5. You can check the status of your return online
As a rule, information about the return will be available through the online tool and mobile application within 24 hours after the IRS confirms receipt of the tax return in electronic form.
6. Maybe it's time to adjust your deductions
If you are disappointed with this year's tax refunds, or worse, find you still owe it, you can avoid a similar fate next year by adjusting your withholdings.
If more tax money is deducted from your salary during the year, this will mean that you are less likely to owe money to the state during the tax period and are more likely to receive a refund.
IRS recently released a new tool Tax Withholding Estimator and encourages you to use it to determine if you should adjust your retention.
If you use a new appraiser and decide to adjust the deduction, the appraiser will even help you fill out a new W-4 form to hand it over to your employer.
7. You can make the return more valuable
A tax refund may be of more value than its face value if you use it to save money or make important investments.
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