Whether you are living in Canada or in the US, tax days are crucial for everyone.
The days are spent preparing, filing and sending paperwork to the IRS/CRA. There are various perks of filing the tax returns and the most important one is that there are higher chances of you receiving a refund from the government. This gives you an easy way to pay off your consolidated credit, stash it off as savings, use for credit card debt relief, or invest in a profitable fund.
For this article we are going to focus on US tax returns and why your tax return check might be missing.
1. Filing Error
As per the IRS, the most common mistake people make that results in failing to process applications and dispatch tax refunds is not providing mandatory information on the form. Moreover, people also fail to provide additional documentation that is required. Sometimes, the mistakes are not as significant as others, but the frequent occurrence of so many forms makes it difficult for the IRS to handle. Some common discrepancies include wrong filing statuses and withholding numbers, incorrect social security numbers, misleading information, etc.
2. You Might Have Missed Filing the Returns
There have been instances when people have realized late that they failed to file their tax returns. In such cases, there will be no tax refunds since your returns were never filed by you in the first place. Do not worry, the IRS will return to you in sometime one way or the other as mentioned above.
3. Back Taxes
The IRS certainly does not approve of people failing to make their tax payments. And most importantly, it knows how to scoop out the money from defaulters. Even if you are not a tax evader, and couldn’t just make it on time, the IRS has got other clear methods to get their sum of money. A lot of people follow a misleading notion that the IRS puts a tax lien on the properties of people who fail to file tax. However, the truth is that IRS can retain your refund and carry it forward for paying back taxes. So, if you owe money to the IRS and expect a refund at the same time, you might receive the “balance” amount if any, or may be no money at all as a result of an offset transaction.
4. You Might Have Submitted Your Returns Late
Many people also fail to submit their returns on time which means although their filings have been dispatched by them, they do not reach the IRS offices on time. The consequences of doing so can be different; the IRS authorities may not take notice of and handle filings submitted after due date or it could be the other way around.
5. Student Loans
If you have financed your college/university education through federally granted student loans, which you are also a defaulter at, the IRS has the right to claim back your fund. And in fact, IRS does this for every such student who fails to pay the loan. The IRS and the education department work in collaboration with each other. As a result, although, the effect of defaulting on the IRS might not appear almost immediately, you will soon be caught up by the authorities on it.
6. You Moved and Did Not Update Your Current Address
This has happened with many people when they filed their returns stating addresses that they changed before receiving their tax refunds. If that’s the case, you must contact the IRS as soon as possible and clarify the situation.
7. Child Support Payments
Many people are defaulters on their child support payments, which in turn affects their yearly tax refund. Although, it might take some time for the authorities to come into action, they surely will do so. In many instances, parents have believed that they are not responsible for the IRS payments of their children above 18 years of age. In fact, the IRS will still approach you to pay the outstanding amount for your children’s yearly tax refunds.
8. Time Frame
If you have not yet received your check do not worry. Most probably you are expecting it at a wrong time. Those who file returns by mail, receive their refunds within six weeks. On the other hand, if you sent it by mail you will receive it within three weeks. If you did it using direct deposit, you will receive it even earlier. However, refunds through amended tax returns might take 8 to 12 weeks of time.
During times when credit conditions are undergoing the worst phase, tax refunds are a blessing in disguise. You should try to make the most out of it since most of the time these are not small sums of money and should be used for beneficial purposes. It is always better to file your tax refund at time, so you do not have to face the hassle later.
About the Guest Writer:
The above article is written by Angelina Jennifer of consolidatedcredit.org is a finance writer and adviser.