With only a few weeks to go before the April 15 tax filing deadline, millions of Americans are digging up their W2s and firing up their calculators. Many will find they are owed a refund by the IRS.
There are many ways to get your IRS refund money, some more expedient than others. There are also paid services -- some would call them scams -- that could get you your money quicker, but they don't come cheap. Read on to find out more.
Where is my IRS refund?
The IRS will send you your IRS refund after you submit your taxes and they are processed. If you mail your taxes, it can take three to four weeks to process them and send you your IRS refund. For electronic submissions the IRS expects it only will take three to four days to process your refund.
The IRS provides a convenient website for people to check the status of their refund. To use the website, taxpayers need three pieces of information:
- Social Security number.
- Filing Status (Single, married, etc.)
- Exact refund amount on your tax return.
The tool shows the benefit of filing electronically, as the IRS says people who do so can check it 24 hours after submitting their taxes to see the status of their refund. Taxpayers who file by mail are asked to wait 28 days to check the status of their refund on the site, also known as 28 times longer than if you had filed electronically. If you call or walk into an IRS office the times are longer. If you filed electronically, you must wait 21 days to call to check the status. If you filed by mail you must wait 6 weeks to call to check the status.
The length of time for you to get your IRS refund then also depends on whether you requested a check from the IRS or a direct deposit. Direct deposit is much faster than having the government mail you a check.
Immediate IRS refund?
H&R Block (NYSE:HRB) and other tax preparers offer taxpayers the option of getting their IRS refund early through refund anticipation checks or other similar methods. The tax preparer offers you a check for your IRS refund minus fees that you can use immediately. H&R Block advertises this as "pay nothing out-of-pocket," which is true, but the fees certainly add up.
While you pay nothing now, what you'll get is a lower refund. For this service H&R Block charges $54.95 for a federal refund or $33.00 for a state refund, $20 less from each if you accept direct deposit. The other option is taking a Emerald prepaid card, which has numerous fees of its own.
In my opinion, only those who are the most desperate for cash would ever accept these deals, yet plenty of Americans choose to take H&R Block up on the offers. For example last year, H&R Block's financial year ended April 30, 2013, just after tax season. The company made $158 million from refund anticipation checks, $99 million from Emerald card fees, and $59 million in income from interest and fees on Emerald advances. That's $300 million that could have been in taxpayers' pockets rather than in H&R Blocks'!
The best way to get your IRS refund quickly
A little bit of education goes a long way. The best way to get your IRS refund is to file electronically and get the money direct deposited into your bank account.
Find Dan Dzombak on Twitter, @DanDzombak, or on his Facebook page, DanDzombak. He has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.