It's estimated that roughly 80% of tax filers end up getting a refund each year, and we'll probably see a similar result once those 2017 returns start rolling in. If the IRS is currently sitting on a chunk of your money, the good news is that you have an opportunity to get it by mid- to late February. That's because the IRS will start accepting returns as early as Jan. 29 and expects to issue most refunds within three weeks -- so if you get moving on your taxes, you could get your money sooner.
That said, there are certain actions you might take that wind up delaying your refund. Here are a few you should know about.
1. Botching or omitting key information on your return
Not only will a major error on your tax return delay your refund, but it'll also probably cause your return to get downright rejected. Some common mistakes include:
- Entering an incorrect Social Security number.
- Misspelling your name, or entering a non-official version of it (for example, writing "Danny" instead of "Daniel").
- Forgetting to sign your return.
- Listing the wrong tax filing status.
In fact, there's a host of ways you might mess up your return, so your best bet is to review that document thoroughly before submitting it to the IRS. You may even want to prepare your return, walk away for at least a few hours, and then revisit it later on, when you'll be more likely to catch mistakes. Otherwise, know that even a seemingly small error might cause you to have to wait on your refund.
2. Filing on paper
Though the IRS encourages taxpayers today to file their returns electronically, there are still a number of folks out there who prefer to keep it old school and file on paper. But that's a mistake that could result in a longer wait for your refund.
First of all, when you file a paper return, you're more likely to make a mistake than with an electronic one. The IRS reports that the error rate for paper returns is about 21%. The rate for electronically filed returns? Less than 1%. Furthermore, whereas it takes about three weeks to get your refund after filing taxes electronically, the wait time for refunds on paper returns is an estimated six to eight weeks. And that's reason enough to go the electronic route.
One more thing: Requesting your refund through direct deposit will get it to you sooner than a check in the mail. Just be sure to enter your bank account information correctly to avoid any hiccups.
3. Claiming the Earned Income Tax Credit or Additional Child Tax Credit
The Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) are credits available to low-income households. Because both of these credits are refundable, they're subject to higher levels of fraud than credits that are non-refundable (since non-refundable credits don't produce a refund). As a result, the IRS is required, by law, to withhold refunds associated with these credits until mid-February. That means if you're claiming either, you won't get your money until the end of February or later if you file your return in late January.
Now here's some more bad news. If you're claiming either credit, the IRS is required to withhold your refund in full -- even portions having nothing to do with the EITC or ACTC. In other words, if you're due a $500 refund from the EITC and a $2,000 refund from having overpaid your taxes during the previous year, the IRS will withhold the entire $2,500 until the aforementioned deadline.
Of course, this isn't to say you shouldn't claim one of these credits if you're so entitled. Rather, just be aware that in doing so, you may have to wait on your refund a bit longer. On the other hand, if you're not planning to file your return early, you may not run into any delays.
Whether you're due a $500 refund or a $5,000 refund, it pays to want to get your hands on that cash as early as possible. Play your cards right, and with any luck, that money will hit your account before you know it.
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