When you are waiting for your tax refund, any delay can be frustrating. Understanding the typical reasons for delays can allow you to prevent getting frustrated and set your expectations accordingly. Let us examine some typical causes:
Errors or incomplete information on your tax return
Even minor mistakes on your tax return can lead to processing delays. Common issues include:
- Missing or incorrect Social Security Numbers (SSNs): Ensure that all SSNs, including those of dependents, are entered accurately.
- Math errors: Simple arithmetic mistakes can cause the IRS to pause processing your return.
- Unsigned returns: Forgetting to sign your paper return can result in delays.
According to the IRS, returns with errors or incomplete information may require further review, leading to delays.
Read more: What are FICA and SECA taxes?
Discrepancies in income reporting
If for some reason the income you declare does not match what employers or financial institutions have provided to the IRS regarding your income, it may cause a delay in your refund. In such instances, the IRS may need to examine discrepancies, and that may lead to a further delay in processing.
Claiming certain tax credits
Claiming credits like the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) can result in delays. The IRS holds refunds involving these credits until at least mid-February to verify eligibility and prevent fraud.
Read more: What income is free from federal taxes?
Identity verification
If the IRS suspects identity theft or fraud, they may delay your refund and request additional verification. This process ensures that refunds are issued to the correct individuals but can extend processing times.
Incorrect direct deposit information
Providing incorrect bank account or routing numbers can cause your direct deposit to fail. In such cases, the IRS will issue a paper check, which takes longer to arrive.
Read more: What is the minimum amount you can earn and not file taxes?
Filing a paper return
Paper filings need to be handled manually, which takes longer than the electronic process. The IRS estimates that a refund can take as long as six weeks from the time the return was filed in paper form, while one filed electronically generally takes three weeks.
Outstanding debts or obligations
If you owe certain debts, such as federal or state taxes, student loans, or child support, your refund may be offset to pay these obligations. The IRS will notify you if your refund is applied to any debts.
Read more: How to deal with filing your taxes after suffering a wildfire disaster
IRS backlogs and processing delays
Now, some difficult situations have landed the IRS into hot waters like a reduced number of staff along with the burden of increased work which might have resulted in delayed processing. The processing of refunds on error-free returns may still be delayed, however, due to systemic conditions.
How to check your refund status
In order to verify your refund status, you can use the IRS’s “Where’s My Refund?” feature. It is an online tool that provides information regarding the processing of your return and refund date.
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Steps to avoid refund delays
If you want to reduce the chances of a delayed refund, here are a few things you need to do:
- Double-check your return: Ensure all information is accurate and complete before filing.
- File electronically: E-filing reduces errors and speeds up processing times.
- Opt for direct deposit: Choosing direct deposit over a paper check can expedite your refund.
- Respond promptly to IRS requests: If the IRS contacts you for additional information, provide it as soon as possible to avoid further delays.
By being meticulous and proactive, you can help ensure a smoother tax refund process.
Continue reading:
How to claim an ACTC refund: requirements for Additional Child Tax credit
Can you claim a boyfriend or girlfriend as a dependent on income taxes?
