Now that the tax filing season is in full swing, it is apparent that many have been unpleasantly surprised by new rules and resulting delays for certain categories of returns. In order to quell some of the confusion and help make things more straightforward for those who have yet to file, the professionals of Rosenberg Martin Greenberg have assembled some useful information concerning this year’s updated procedures.
Not all refunds are impacted by the new rules
Broadly speaking, the taxpayers most likely to be impacted by the new laws are those who claim either the Additional Child Tax Credit (ACTC) or the Earned Income Tax Credit (EITC). Refunds on returns claiming these credits are required to be held by the Internal Revenue Service until February 15. It should be noted that refunds of this nature may not make their way into bank accounts until at least the week of February 27, provided the taxpayer elected to receive the funds via direct deposit and no other processing issues arise. Those who claim neither credit should proceed with their filings as usual. Though 9 out of 10 refunds will be issued by the IRS within 21 days of filing, there are situations in which funds take longer to disburse.
The IRS is the best source of refund date information
So many taxpayers labor under the assumption that getting in touch with their tax preparation professional or speaking with an IRS representative is the best method of learning when their refund will appear. However, this is simply not the case. The “Where’s My Refund?” function of the IRS.gov website or the agency’s mobile app is in fact a very timely and accurate way to get the desired information. Refund status is updated once daily, and therefore only necessary to check once per day.
Taxpayers need not bother ordering tax transcripts to learn refund date
Another widely held misconception among taxpayers eagerly anticipating a refund is that ordering an IRS transcript is an effective “back door” way to discover when those funds are likely to be in hand. The fact is that transcripts are far more valuable as a means to verify past filing status and income levels for a number of other purposes (business loan applications, tax planning and the like), and they do not offer the type of updated refund date information available via the “Where’s My Refund?” tool. According to officials from the IRS, those who expect to receive refunds on their tax returns and wish to expedite the process are best advised to simply submit their filings as early as they can, take advantage of e-filing capabilities and opt to have their money sent via direct deposit.
Tax planning and compliance assistance across the Mid-Atlantic region
Regardless of your unique tax compliance, controversy or planning needs, the professionals at Rosenberg Martin Greenberg stand ready to offer the seasoned insights and comprehensive strategies required to reduce liabilities, simplify processes and keep you or your enterprise on the right side of state and federal revenue authorities. If you are interested in learning more about how we can help, we invite you to contact us at (410) 727-6600 to schedule a confidential consultation and review.
- Forbes, IRS Addresses Top Tax Refund Myths As Tax Season Rolls On, http://www.forbes.com/sites/kellyphillipserb/2017/02/01/irs-addresses-top-tax-refund-myths-as-tax-season-rolls-on/#56acabd07a15
- Internal Revenue Service, Refund Timing for Earned Income Tax Credit and Additional Child Tax Credit Filers, https://www.irs.gov/individuals/refund-timing
- New York Times, For Earned-Income Credit Filers, Refunds Will Be Later, https://www.nytimes.com/2017/01/04/your-money/money-adviser-tax-refunds-tax-credits.html