The tax deadline has passed and you now eagerly await the arrival of your tax refund. Regardless of whether you expect a few bucks or a small fortune, receiving an additional sum of money can be a pretty exciting prospect. As with many things the IRS has jurisdiction over, a number of myths surround tax refunds. Here are the main tax myths you should be aware of after sending in that tax return.
Myth #1: All Tax Refunds are Delayed
Generally speaking, if you have electronically filed your tax return, you can expect your refund within 21 days of the IRS approving your return. As with tax return submissions via mail, the processing time is about 6 to 8 weeks after approval. While this remains true for more than 90% of cases, some refunds take longer. If a tax return claiming the Earned Income Tax Credit or the Additional Child Tax Credit was filed month in advance, recent legislation has made it so that refunds are held until mid-February. A variety of other circumstances may require that the refunds are reviewed for a longer period of time. Efforts to combat fraud and identity theft may also be a cause for a delayed refund.
Myth #2: Calling Will Expedite Refund
A common misconception is that calling the IRS or a tax professional will reduce the waiting time on a tax refund. The online tool, “Where’s My Refund” provided by the IRS, is most often the best way to check the status of a refund. The IRS updates the status of refunds once a day, typically at night. Checking your status multiple times throughout the day will likely yield no new results. Additionally, “Where’s My Refund” has the same information available as IRS telephone assistors. Both methods of inquiry will likely provide the same information.
Myth #3: Ordering a Transcript to Find Out Refund Date
Tax transcripts are essentially copies of your tax return – they include most lines items from the tax return you originally filed. It will also include items from any accompanying forms and schedules you have filed. They are typically ordered when you can’t find your tax return. They, however, have nothing to do with your refund date.
Myth #4: IRS Refund Tool Not Working Due to Deposit Date
The “Where’s My Refund” tool may not show the deposit date yet if you’re checking too early. Your tax form needs to be processed first and your refund must be approved before a date will be given. The date your tax return was submitted will have no bearing on actually receiving a tax refund date.
Myth #5: Delayed Refunds Claiming EITC/ACTC Will Be Delivered on February 15
February 15th is the first date of release for the refunds claiming EITC/ACTC. However, it may take week to receive them in bank accounts or mailboxes.
Myth #6: You are Safe from Audits Once Refund is Received
Delivery of your tax refund means that the IRS has reviewed and acknowledged the calculations made on your return as correct. After your refund is paid, the IRS send your return through a computer check that compares it to a computer model. Those with the greatest likelihood of yielding more taxes, interests, or penalties are audited. The audit process generally begins three to four months after the filing deadline, however the IRS can audit a return up to here years after it is received.