Five Myths About Tax Refunds

Five Myths About Tax Refunds

As the April tax-filing deadline approaches taxpayers are generally anxious to get details about their tax refunds. This has led to a number of common myths about refunds that often circulate on social media.

While there’s no secret way for taxpayers to find out when their refund will be issued, there are some key facts that can help people understand the refund process. Taxpayers should keep in mind the IRS issues nine out of 10 tax refunds in less than 21 days. And the easiest way to check on a refund is “Where’s My Refund?”, an online tool available on IRS.gov and through the IRS2Go app.

Keep in mind the IRS advises that taxpayers should only call the IRS tax help hotline to talk to a representative if it has been:

  • 21 days or more since their tax return was e-filed,
  • Six weeks or more since their return was mailed, or when
  • “Where’s My Refund?” tells the taxpayer to contact the IRS.

Read on for the five common refund myths:

Myth 1: Calling The IRS Or A Tax Professional Will Provide A Better Refund Date

Taxpayers eager to know when their refund will be arriving should use the “Where’s My Refund?” tool or automated refund hotline at 800-829-1954 rather than calling and waiting on hold or ordering a tax transcript. “Where’s My Refund?” has the same information available to IRS telephone assistors so there is no need to call unless requested to do so by “Where’s My Refund?” The IRS2Go mobile app is also a fast way to find out the same information.

Myth 2: Ordering A Tax Transcript Is A ‘Secret Way’ To Get A Refund Date

Ordering a tax transcript will not help taxpayers find out when they will get their tax refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation, they should use “Where’s My Refund?” to check the status of their refund.

Myth 3: ‘Where’s My Refund?’ Must We Wrong Because There’s No Deposit Date Yet

Updates to “Where’s My Refund?” ‎on both IRS.gov and the IRS2Go mobile app are made once each day – usually overnight. Even though the IRS issues most refunds in less than 21 days, it’s possible a refund may take longer for a variety of reasons including when a return is incomplete or needs further review.

This means that in some cases, a taxpayer who filed later may receive their refund sooner than someone who filed earlier in the season. The IRS will contact taxpayers by mail when it needs more information to process their tax return. Also, remember to consider the time it takes for financial institutions to post the refund to the taxpayer’s account or to receive a check in the mail.

Myth 4: ‘Where’s My Refund?’ Must Be Wrong Because A Refund Amount Is less Than Expected

There are several factors that could cause a tax refund to be larger or smaller than expected.

Situations that could decrease a refund include:

  • Math errors or mistakes;
  • Delinquent federal taxes;
  • State taxes, child support, student loans or other delinquent federal nontax obligations; and
  • IRS holds a portion of the refund while it reviews an item claimed on the return.

The IRS will mail the taxpayer a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury’s Bureau of the Fiscal Service if all or part of their refund was reduced and offset to pay certain financial obligations.

Myth 5: Getting A Refund This Year Means There’s No Need To Adjust Withholding For 2019

Annual tax planning is for everyone. To help avoid an unexpected tax outcome next year, taxpayers should make changes now to prepare for when they file 2019 tax returns next year. This can mean adjusting tax withholding with their employer or increasing estimated or additional tax payments.

Checking withholding is important every year, and the IRS encourages people to do a Paycheck Checkup. This is especially important for anyone who got an unexpected result from filing their tax return this year because they had too much or too little withheld from their paycheck in 2018.

Use the IRS Withholding Calculator to determine whether the right amount is being withheld. If an adjustment is needed, taxpayers should submit a 2019 Form W-4, Employee’s Withholding Allowance Certificate, to their employer as soon as possible.

Have Questions Regarding Your Tax Refund?

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Any tax advice herein is based on the facts provided to us and on our interpretation of tax legislation as it reads at the time the advice is provided. Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties. We are not responsible for updating our advice for changes in law or interpretation after the date the advice is provided. Every tax situation is different. We are not responsible for the tax implications to any individual or entity that may act on this advice.