The IRS on the IRS.gov website notes that tax refund distribution ranges from 21 days to about six weeks once you file your tax return,. With over 75 percent of all tax filers getting a tax refund and the average federal tax refund at about $3,000, what should you know to get your refund as fast and safely as possible? Here are some steps you can take.
Electronically file your tax return. When you e-file, the IRS will receive and process your return faster than filing a paper return by a couple of weeks. It's also safer -- no paper copies in a mailbox or on a copier or desk. Your return is even more accurate because of computer processing of the tax information.
File early. File your tax return as early as you can. The IRS starts processing tax returns on Jan. 31, 2014, and if you are in the front of the queue, odds are you will get your refund before others. You can start your return before your W-2 arrives, but you will need your W-2 to finish up and file.
Direct deposit your tax refund. Direct depositing your tax refund into your bank account means your refund is available as soon as it is received by the bank. There's no delay while a deposited paper check is clearing through the banking system. Because there is no delay time for the mail, you can also cut days and weeks off the time versus a paper mailed tax refund check. Direct deposit also eliminates lost checks or stolen check risk.
Use a reputable tax return preparer or tax preparation software. There are a lot of pop-up tax preparers and "free" software with little history this time of the year. Be safe and select a reputable service provider that you know and trust. While it may look less expensive up front it could cost you more in the end.
Verify your information is correct. Errors on a tax return can add to processing time and delay your refund by weeks or months. An example of such an error is claiming a dependent that has already been claimed on an earlier filed tax return by an ex-spouse. Even though your return is correct, the IRS may take weeks and months to straighten out the facts. File early with the correct information.
Do not leave off income items from your tax return. The IRS has gotten very good at tracking taxpayer information -- especially income items from employers, banks and financial institutions, brokers and other income providers. If you leave off an income item, the IRS may simply adjust your refund or balance due or they may postpone your refund and ask you for more information. So even if you did not receive a W-2 for that part time or temporary job or did not get a Form 1099 from that consulting project, the IRS did get it and if you leave off they will have questions and that will take time.
Make sure tax software is used to complete your tax return. Reputable tax preparers use tax software and you should too. Tax software provides accurate math computations and ensures the information is carried correctly from form to form without transposition errors. Remember, math and transposition errors slow down processing at the IRS.
Verify all names and Social Security numbers. The IRS validates all names and Social Security numbers with the Social Security Administration database. If you don't have the correct names with the correct Social Security number, the IRS will not process your tax return until you correct it. This slows down processing time. This is a common error when people marry and the wife takes their spouse's name. In the excitement of a new life, they forget to update their Social Security records with their new last name, but do update all of their IDs, so their W-2s reflect the new last name. Take the time now to make sure your Social Security account has the correct name so your tax return processing and any refund isn't delayed.
Claim all your deductions. Unlike the missing income items, the IRS will not slow processing or add any missing deductions. Instead, you will have to file an amended return to get any additional refund AND amended return processing takes up to 12 weeks or more.
Ask questions. If you aren't sure about any credits, deductions, or even income ask a tax professional or go to IRS.gov. Don't delay your tax return or leave money on the table because you don't know.
As noted above, last year about 75 percent of all taxpayers got a tax refund and that was about 110 million filers. The average tax refund was about $3,000. It is your money the government owes you. Get your money back and get it back faster file early and electronically file.
Look for next week topic: why a big income tax refund is a good thing despite experts commentary to the contrary.