Tax season may not be fun, as you receive confusing documents in the mail and prepare your return -- but tax refund season is indeed fun. You may already have a plan for that money, such as paying off debt, bolstering an emergency fund, or taking a vacation. If so, you may be wondering what the fastest way is to get your tax refund.
There's a simple answer to that question. For the fastest tax refund, you'll want to e-file your return and use direct deposit for your refund. Making sure your return is complete and error-free will also help. Remember, too, that the deadline for filing your tax return this year is April 18, because April 15 falls on a weekend and the 17th is a holiday in Washington, D.C. (It's Emancipation Day, in case you're wondering.)
When can you expect your money?
The IRS wants to get your money to you as quickly as it can. It aims to issue most refunds to taxpayers within 21 days -- if you filed your return electronically. It also offers a handy service, aptly called "Where's My Refund?," that can help pinpoint exactly when you can expect to receive your money. (There's also an IRS2Go mobile app.) If you mailed in your return, your refund will arrive later. How much later? Well, the IRS encourages you to not even look up when to expect it until a month after it receives it.
Meanwhile, your refund can also get delayed if your tax return was incomplete, contained errors, or was suspected of being involved in identity theft or fraud. If there are liens against you, you owe back taxes, or you face refund offsets (perhaps because you owe money for child support, outstanding student loans, or state income taxes), you can also expect delays -- not to mention a reduced or even wiped-out refund.
In addition, if you're claiming the Earned Income Tax Credit or the Additional Child Tax Credit, the IRS will not start releasing your refund until Feb. 15 and you may not receive your funds until about Feb. 27 -- if you filed electronically with direct deposit.
Reasons to file your return early -- or late
Clearly, filing as early as possible will get your refund to you as soon as possible. That's an excellent reason to file early. Another good reason is to prevent tax-return fraud. That happens when someone impersonates you (using your Social Security number, for example), filing a tax return in your name and collecting a refund. It has been happening to hundreds of thousands of taxpayers in recent years, and the IRS has been fighting it with some success. By filing your return early, you give any would-be scam artist less time to grab a refund in your name.
But there's also a reason to wait a bit before filing your return. Remember that if you have a bunch of financial accounts, you'll be needing to collect 1099 forms or other tax documents for each of them to incorporate into your return. If you file before you receive them all and have failed to account for all your dividend or interest income or other matters, then your return will likely be flagged and delayed -- and possibly audited. If you file your return early and then receive a 1099 form, you'll need to file an amended return.
The best plan is to file as soon as you have all the documents you need. In addition, file electronically and set up direct deposit for your refund.
For best results...
Here's the bottom line, from the IRS itself: "The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days." Additionally, "Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund."
If you have a refund coming your way, start working on your tax return now and get it filed as soon as you have all the necessary information for it. Your bank account may receive a welcome deposit in only a few weeks.