If you're due a tax refund this year, you're not alone. An estimated 80% of U.S. tax filers receive refunds for overpaying their taxes, and if you're one of them, you're probably itching to find out where your money is. Fortunately, the IRS makes it easy to check on the status of your tax refund. Its handy "Where's My Refund?" tool can help you track your refund once you've submitted your return.
IMAGE SOURCE: GETTY IMAGES.
An easy way to keep tabs on your tax refund
The IRS isn't exactly known for making life easy for taxpayers, but if you're waiting on a refund, you can go online and quickly find out what its status is. To use the "Where's My Refund?" tool on the IRS website, you'll need to have the following information on hand:
- Your Social Security number
- Your tax filing status
- Your exact refund amount
Once you input this data, you'll receive a date for when to expect your tax refund.
When to check on your tax refund
If the IRS is sitting on your money, you're probably eager to get it right away. The good news is that if you file your taxes electronically, you can check on the status of your refund within 24 hours. If you opt to send in a paper return, however, you'll typically need to wait four weeks before checking up on your tax refund. Also keep in mind that the "Where's My Refund?" tool is only useful for checking up on your federal tax refund. To get an update on a state tax refund, you'll need to check your individual state's tax department or agency website.
You might get that money sooner than you'd think
Think you'll be waiting on your tax refund for weeks and weeks on end? You may be surprised to learn that it typically takes the IRS three weeks or less to issue refunds for electronic returns, and if you sign up for direct deposit, you might see your money even sooner. If you file a paper return, it'll probably take more like six to eight weeks to get your refund, which is just one reason why it pays to file electronically.
Of course, when it comes to refunds, things don't always go so smoothly. Your refund might be delayed if the IRS requires additional information to support your return. Furthermore, if you make an error on your tax return, it could cause your refund to arrive later than expected. To reduce your chances of making a mistake on your taxes, consider filing electronically rather than by mail. The IRS estimates that the error rate for paper tax returns is 21%, while the error rate for electronically filed returns is less than 1%. The more accurate your return, the sooner you're likely to see that refund.
Don't celebrate that refund just yet
Many taxpayers are thrilled to find out they're due a refund, but getting money back from the IRS isn't necessarily a good thing. If anything, it means that you paid too much in taxes throughout the year and missed out on the opportunity to use that money earlier on. It also means that you essentially lent the U.S. government money for free. If your refund is relatively high, you might consider adjusting your W-4 to have less money taken out of your paychecks for taxes. This way, you'll have access to that money -- your money -- as soon as you earn it.
