Although the April 18 tax deadline is still a month away, many Americans have already gotten their tax refund from the IRS, with over 38 million individuals receiving refunds averaging $3,401.
If you submit your tax return electronically and choose direct deposit, you should get your refund in approximately 21 days, according to the IRS. Even if you complete everything correctly, you may still have to wait for the IRS to send you your money.
While the three-week estimate may be true for the average tax filer, there are a number of variables that might cause your tax refund to be delayed. According to CNET, these are some of the most common reasons why your IRS refund may be delayed this year.
1. Tax return is incomplete or has errors
It’s critical to double-check any information you’ve put on your tax return to ensure it’s correct. Don’t mix up the amounts of state taxes withdrawn with the numbers of federal taxes withheld, for example. Take a second check at your taxes before submitting them to the IRS to make sure there are no errors and that you’ve filled out every field.
2. You filed for CTC/EITC
If you filed your return in January and included the child tax credit or earned income credit on your taxes, by law, the earliest you can get a refund is mid-February. This is to give the IRS more time to prevent fraudulent refunds from being issued.
3. You owe money to the IRS
If you owe the IRS money, the government may deduct a portion or all of your tax refund to cover the amount. If your refund is greater than what you owe, you’ll get the difference by direct deposit or a check in the mail, although it may take a while.
4. Incorrect bank information
Have you made any bank account changes since your previous tax filing? If that’s the case, pay particular attention to the direct deposit information while filing your tax return this year. Your refund will be sent back to the IRS if you fail to update it with your updated direct deposit information. This will almost certainly result in a paper check being delivered to your home, which might take several weeks.
5. You choose a paper tax return
The IRS is pushing people to file electronically and set up direct deposit this year to receive their refunds faster. Due to mail delays, it may take a long time for the IRS to receive your return and much longer for a paper check to be issued.
6. Suspected identity theft
If the IRS suspects that a tax return may be used to commit identity theft, your refund will be held until your identity is confirmed. When this happens, you’ll probably get a 5071C letter with instructions on how to prove your identification. Don’t be alarmed if your tax return is authentic; an IRS letter does not imply proof of identity theft, only a suspicion.
If you receive a notification from the IRS stating that your tax return requires additional examination, your refund will take longer than the usual three weeks to arrive. If you get a CP07 Notice, for example, it implies the IRS has received your tax return and is delaying your refund while it conducts a more comprehensive investigation. If you claim treaty benefits or deductions on Schedule A (PDF) of your taxes, you may receive this notification.
Tax refund filing is extended
Following initial technical issues following the launch of the new Income Tax e-filing portal – as a result of which the due date for filing the Income Tax Return (ITR) for the Assessment Year (AY) 2021-22 was extended until December 31, 2021, for those assessees whose incomes were not subject to tax audit – approximately 6.25 crore taxpayers were able to successfully e-file their ITRs.
More importantly, the new site has sped up the return processing procedure, resulting in the processing of over 4.5 crore returns and the distribution of most tax refunds, as per The Financial Express via MSN.