2012 Tax Refunds are coming in later and are much lower than in prior year for many individuals.
For many, IRS Income Tax refunds have been coming in much later this year compared to prior years. Also, the amounts have been so much lower in comparison leaving many families let-down.
While the IRS isn’t putting out numbers on how many refunds have been issued so far this tax season, refunds got off to a bit of a bumpy start this year.
Blame it on a perfect storm of events: A late launch to the filing season, which started Jan. 30 – eight days later than usual – due to last-minute, “fiscal cliff” tax changes enacted by Congress; the inability of taxpayers to file for some credits until early March; and more diligent – but time-consuming – scrutiny of tax returns, part of the IRS’ beefed-up efforts to thwart identity theft and tax refund fraud.
Even Wal-Mart said it’s felt the impact of later-than-usual refunds. By this time last year, the giant retailer had cashed about $3 billion worth of checks related to tax refunds. This year, that amount is just $1.7 billion, the company said Thursday.
We at, Hot Springs Tax Services, have noticed that things are looking up. Many individuals are getting their returns back much faster. The only individuals that still are dealing with slower processing are the people using education credits such as hope and american opportunity credit.
In 2012, the IRS said, nine out of 10 refunds were issued in less than 21 days. “The same results are expected in 2013,” said IRS spokesman Richard Panick in an email.
Refunds have especially been slower for many lower-income taxpayers who qualify for the Earned Income Tax Credit. For single head of household filers with two young children, that refundable credit could mean $7,039 in their pocket.
It’s the most significant financial event for them for the year. And now it’s all up in the air. They don’t know when they’ll get their refund.
Where’s my refund?
In recent weeks, so many taxpayers were using the IRS online tool, “Where’s My Refund,” the IRS actually had to issue a plea: Don’t check it more than once a day.
Once you’ve filed a federal tax return, the popular IRS.gov tool lets you track your refund’s progress: when the return was received, when a refund was approved and sent out.
But in mid-February, so many people were clicking “Where’s My Refund?” the system jammed up. The online tool is only updated every 24 hours, the IRS noted, so repeated attempts to check online or from a smartphone won’t yield any new information.
“A taxpayer’s account isn’t likely to change that often, so there’s no need to check more than once a day,” said Panick. And nights or weekends, when the IRS site’s traffic slows down, are the best times to check your refund’s status, he added.
With an e-filed return, you can check within the first 24 hours after it’s filed. With a paper return, check four weeks after you mailed it.
Avoid refund delays
One of the best ways to avoid refund delays: submit an “error-free” tax return. And we’re not necessarily talking about math mistakes. To avoid processing delays, the IRS reminds taxpayers to:
• Verify the Social Security numbers for yourself, spouse and dependents.
• Be sure your mailing address is correct. (Every year, thousands of refunds get returned as “undeliverable” by the U.S. Post Office because taxpayers either moved or provided an incorrect address.)
• Double-check your bank routing numbers if requesting direct deposit.
Speeding up refunds
The quickest way to collect your tax refund is by requesting “direct deposit” when filing. It goes straight into your checking or savings account.
On other tax fronts
The IRS said most taxpayers should have received their W2s and 1099s by mid-February. If you’re still waiting, contact your employer or issuer; or call the IRS at (800) 829-1040 if you can’t get a replacement.
The IRS is predicting that the number of tax returns filed this year will go up about 1.6 percent. In 2012, the average tax refund was $2,803.
HANDY IRS INFORMATION
• For basic tax questions: call (800) 829-1040 or use the IRS website: www.irs.gov.
• Free tax-filing help: Seniors and moderate-income taxpayers can use Volunteer Income Tax Assistance sites. Search for a VITA site by ZIP code: http://irs.treasury.gov/freetaxprep/, or call (800) 906-9887.
• To check your refund: Use the IRS website’s “Where’s My Refund?” tool or download the “IRS2Go” mobile app. Or call (800) 829-1040. You’ll need your Social Security number, filing status and refund amount from the return.
• Fastest way to a refund: Use direct deposit when filing and submit an error-free return.
• A reminder: Some IRS forms cannot be filed until early March, including mortgage interest, electric vehicles and residential energy tax credits.
SMALL BUSINESS FINANCIAL HELP
Hire a professional accountant to help with your small business needs. Contact us today.