One of the most frustrating things about filing your taxes is the possibility of a delay. Even the shortest wait can impact your cash flow. Here are a few tips to avoid tax refund delays. First, make sure that your return is filed correctly. Whether you file electronically or on paper, double check your account number and routing number. If you file incorrectly, you will have to work with your bank to retrieve your money.
Using tax-filing software is a smart idea for people who have little or no experience with preparing their own returns. Filing electronically can also significantly reduce the amount of time it takes to process a tax return. Moreover, because it eliminates the need for manual processing, electronic filing results in a quicker refund.
Another reason why you might experience a tax refund delay is if you filed your return late. Usually, the IRS takes up to 21 days to process your return. The IRS also adds interest to your refund if it isn’t received by the deadline. However, if you file your return electronically, you should be prepared for a delay of a few days.
Moreover, if you claim the Earned Income Tax Credit (EITC), you may have to wait longer to receive your tax refund. This is because the IRS has to hold the refund until mid-February because of the Protecting Americans from Tax Hikes (PATH) Act. This law was designed to give the IRS more time to detect fraud.
One of the best ways to avoid tax refund delays is to make sure your account information is correct and updated. You should also make sure that the IRS has the correct contact information. This will help them find you easily in case there is a problem with your address. If you are unable to answer the IRS’s questions online, you can call the IRS to verify your identity. However, you should keep in mind that calling the IRS can be frustrating.
Another way to avoid tax refund delays is to make sure you file electronically using direct deposit. By doing this, you will avoid the IRS from having to sort through your mail or correct any math errors. Also, by ensuring that you file your taxes electronically, you can usually expect a refund to arrive in as little as 21 days.
Another way to avoid tax refund delays is to check the IRS’ website often. The IRS will often post updates on its website about when a refund is issued. By checking this website regularly, you can make sure that the process is going smoothly and get your money in the shortest time possible.
Another tip to avoid tax refund delays is to properly report your income. Reporting your income accurately will help you avoid penalties and interest, which could result in a delayed or even no refund. In addition, be sure to report any capital gains and unemployment compensation. Although the special 2020 provision allowed for unemployment compensation to be excluded from taxes, this provision will not apply to taxes in 2021.