Update 7/2021: Over the course of the past few weeks the IRS has sent out more than 4 million income tax returns to hose who filed unemployment last year. These are in addition to the refunds sent out since May under the American Rescue Plan.
In a typical tax season, a person would file their taxes then wait roughly twenty-one days for the receipt of their income tax refund. Even with pre-season, an earlier filing would be submitted on opening day with the refund balance being paid out within the IRS guidelines depending on factors such as filing status and credits claimed.
This past year or so what used to constitute a straightforward season has been chaotic, to say the least. With the passage of multiple tax law changes, economic impact payments, recovery rebate credits, and most recently the reduction of taxes owed on the first $10,200 in unemployment benefits received in the tax year 2020, there are bound to be some delays. But there are a few things that you can do to ensure a good outcome while you wait for your return.
1. Check Your Status
The IRS has a tool on their website which is usually available within a couple of weeks of the tax season’s opening day. This tool called Where’s My Refund is available to all filers who submitted a return electronically. By entering information such as your name, social security number, and filing status, you will be notified of where you are in the processing stages.
2. Keep An Eye On Your Mail
Although it may not be the case for everyone, tax audits have increased tenfold in the past decade to help combat fraud as well as the receipt of overpayments. If you are selected for an audit the IRS will send you a notification letter in the mail advising you that your refund is being held for auditing or possible fraud detection purposes. These letters or notices will clearly lay out what instructions or documentation you may need to submit or follow in order to have your issues resolved within the allotted time frame.
3.) Contact Your Original Preparer
Tax preparers are bound by a strict set of guidelines, laws, and rules set forth by multiple governing agencies. Their number one priority is to provide you a great customer experience while obtaining the maximum possible refund according to your tax situation.
If you have checked online and nothing has shown up in the mail then your tax preparer may have some information. It’s not possible for them to obtain an exact refund date outside of the information readily available to you, they may be able to assist you if the refund was rejected due to errors, omissions, or guide you to the proper contact information.
4.) Consider a Personal Loan
Personal loans come in many shapes and sizes but one place you may not have considered is from yourself. According to CNBC, over sixty percent of Americans have enough savings to cover emergency expenses. Being in this position could be used to your advantage by loaning yourself a portion of the money to tide you over for temporary or short-term expenses until you get those coveted funds. This saves time, interest, and an approval process when you use your own funds versus an outside lender.
Over forty million people became unemployed last year due to the Coronavirus Pandemic and a significant number still are. While the IRS is working diligently to process the current year’s returns amid a backlog of 2.4 million from last year, it’s understandable that many are upset and inconvenienced, to say the least. Remember, there are things that you can do to ease the burden and enjoy the sweet spot at the end of the tunnel.