Now that the tax filing deadline is over, taxpayers are now waiting to receive their refunds. Optima Tax Relief reminds taxpayers that they should be aware of several common myths about receiving a tax refund that could mislead them and potentially cause them to get into trouble with the IRS.
Check your withholding
Just because you received a refund does not mean you do not need to adjust your withholding for the next tax year. To help avoid any tax time surprises next year, individuals should start making the appropriate changes now so that they are prepared for the next tax year. Taxpayers have the option to adjust their tax withholding with their employer or they can use the tax withholding estimator on the IRS website to figure out how much they should be withholding per paycheck. This tool is important for anyone who received an unexpected result from filing their tax return this year or for taxpayers who experienced a life event such as marriage, divorce, the birth of a child, an adoption, or are no longer able to claim a person as a dependent.
Find out when you will receive your refund
It is recommended that taxpayers avoid calling the IRS or their tax professional to find out when they will receive their refund. The best way to find out the status of a tax refund is to go on the IRS website and use their refund tracking tool.
If the IRS requires additional information to process a tax return, the agency will reach out to the taxpayer by mail. Taxpayers need to also take into consideration the time it will take for their banks to post the refund to their account. Taxpayers waiting for a refund to arrive by mail should plan for the time it takes for the check to arrive.
Unexpected refund amount
Taxpayers that receive an unexpected refund amount will need to consider several factors that could have caused their refund to be larger or smaller than expected. If an individual sees a decrease in their refund, it could be for the following reasons:
- The taxpayer made math errors or mistakes.
- The taxpayer owes federal taxes for a prior year.
- The taxpayer owes state taxes, child support, student loans or other delinquent federal non-tax obligations.
- The IRS holds a portion of the refund while it reviews an item claimed on the return.
The IRS will notify a taxpayer via mail with a letter explaining why adjustments were made to their refund. Some taxpayers may even receive a letter from the Department of Treasury’s Bureau of the Fiscal Service if their refund was reduced or offset due to certain financial obligations.