Tax Tips: Debunking common myths about federal tax refunds
Once people complete and file their tax return, many of them eagerly await any refund they may be owed. Knowing fact from fiction can help manage expectations as they wait for their money.
Myth: Calling the IRS, a tax software provider or a tax professional will provide a more accurate refund date.
Fact: The best way to check the status of a refund is through the Where's My Refund? tool or the IRS2Go app.
Taxpayers can also call the automated refund hotline at 800-829-1954 to get their refund status. This hotline has the same information about current tax year refunds as Where's My Refund? There is no need to call the IRS unless Where's My Refund? says to do so.
Myth: The Where's My Refund? tool must be wrong if it hasn’t updated yet.
Fact: Where’s My Refund has the most current information about refund status. It is updated once a day, usually overnight. Even though the IRS issues most refunds within 21 days, it's possible a refund may take longer. If the IRS needs more information to process a tax return, the agency will contact the taxpayer by mail. Taxpayers should also consider the time it takes for banks to post the refund to the taxpayer's account. People waiting for a refund in the mail should allow extra time.
Myth: The Where's My Refund? tool must be wrong because the refund amount is less than expected.
Fact: There are several factors that could cause a tax refund to be less than expected. The IRS will mail the taxpayer a letter of explanation if it adjusts a refund. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations. Before calling, taxpayers should wait for the letter to understand why the change occurred.
Myth: Getting a refund this year means there's no need to adjust withholding for tax year 2024.
Fact: To avoid a surprise next year, taxpayers should make changes now to their tax withholding. The Tax Withholding Estimator tool can help taxpayers determine if their employer is withholding the right amount. Taxpayers can use the results from the Tax Withholding Estimator to complete a new Form W-4, Employee's Withholding Certificate and submit it to their employer as soon as possible. Withholding takes place throughout the year, so it's better to take this step as soon as possible.
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Tax Tips: Filing a federal tax return even if it’s not required could put money in taxpayers’ pockets
Some people choose not to file a tax return because they aren't legally required to file, but they could be missing out on refundable tax credits or an income tax refund. This could apply to someone if they:
• Have had federal income tax withheld from their pay.
• Made estimated tax payments.
• Qualify to claim refundable tax credits.
Don’t miss out on valuable tax credits
A few tax credits people can claim on a federal tax return if they’re eligible include:
• Earned Income Tax Credit – The EITC helps workers who earned $63,398 or less in 2023 when they file a federal tax return. Taxpayers can use the EITC Assistant on IRS.gov to check their eligibility.
• Child Tax Credit – Taxpayers can claim the Child Tax Credit if they had a qualifying child under the age of 17 at the end of 2023.
• Credit for Other Dependents – Taxpayers who don’t qualify for the Child Tax Credit may qualify for the Credit for Other Dependents. This includes people who have:
o Dependent children who are age 18 or older at the end of 2023.
o Parents or other qualifying individuals they support.
• Education credits – The American Opportunity Tax Credit is for qualified education expenses for the first four years of higher education. The Lifetime Learning Credit is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution.
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It's the final countdown…the April 15 tax deadline is here! No need to get wound up - TAS has got all of the filing season resources you need to make sure your filing season runs like clockwork.
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