January marks the beginning of the tax-filing season, when taxpayers all across the U.S. file their annual tax returns. A tax return is a form on which a filer reports income, expenses, and other tax-related information to calculate whether they owe money to the government or the government owes money to them. If an employer withheld too much money each month of the past year in taxes, or if someone qualifies for certain tax credits, they may be entitled to a tax refund. Refunds are not gifts of money – but rather they are money an individual paid to the government over the course of the year, in excess of what they actually owe. Refunds can certainly be nice to receive during tax season, and there are steps to take to get the money sooner.
The earlier an individual files a tax return, the sooner they’ll receive their refund. This is because the Internal Revenue Service (IRS) isn’t as busy in January, February, and March as it becomes in April, when all tax filings are due. Many people tend to procrastinate, and the IRS is able to process early returns before most people have submitted their documents. And gathering documents early is important if an individual wants help from an accountant or tax professional during the tax season. For someone who isn’t confident in their ability to correctly file taxes or would simply like assistance, hiring a tax professional can be a great option. But contact them early because these professionals have schedules that can fill up, and they may not be available to help. Most professionals charge for their services, but programs such as CA$H Maine provide eligible filers with free tax preparation services.
Paper tax returns can take anywhere from six to eight weeks for the IRS to process and return. However, if taxes are filed electronically, the IRS can issue refunds within 21 days. There are a number of ways to file electronically:
Someone who makes $72,000 or less per year can use the IRS Free File or Fillable Forms. This online service does all the math on the forms for eligible files and provides guided preparation. Visit: Free File on the e-File Options section of the IRS website (www.irs.gov/filing/e-file-options).
Authorized tax professionals can help people prepare, transmit, and process returns. To find authorized tax professionals visit the e-File Provider Search Tool on the IRS website. (www.irs.gov/e-file-providers/authorized-irs-e-file-provider-locator-service-for-tax-professionals) Always be sure to use an authorized tax professional.
Instead of a paper check, for which the speed of delivery is at the mercy of the postal system, a tax refund can be deposited right into an individual bank account through direct deposit. To sign up for direct deposit, select this option as the refund method when filing, either with a professional’s help or as an individual. Then, enter the bank account number and routing number. Look at a personal check to find the correct routing and account number: on the bottom left corner is a 9-digit routing number, and the account number (usually 10-12 digits) is the second set of numbers printed on the bottom of the check. Someone who doesn’t have personal checks can find the routing and account numbers by logging into an online or mobile banking account, by calling the financial institution, or by visiting a local branch. After verifying the caller’s identity, the financial institution can help find the right numbers.
Filing early, filing electronically, and using direct deposit all help individuals who are expecting refunds to get their money back as soon as possible.