Five Myths About Federal Tax Returns Debunked
If you’ve already filed your taxes this year, you might be eagerly awaiting your tax refund. Maybe you have plans for the money, such as going on a trip or splurging on a purchase you’ve wanted. Or maybe, like 37% of the people GOBankingRates surveyed in February 2022, you want to pay down high-interest credit card debt. Those charges are already growing the longer you wait for your money.
When can you expect your tax refund? There are a lot of rumors circulating concerning how to find out when you’ll get your money. The Internal Revenue Service released a tax tip sheet on March 30 to debunk some of the most common myths.
Myth No. 1: You can find out the status of your tax refund by calling the IRS or your tax preparer.
You may think that calling your tax preparer — or the IRS directly — will help you find out the status of your tax refund. But your tax preparer or tax software provider is already working overtime this tax season to serve customers — including many who have never filed tax returns until this year. You may experience long wait times, and it’s likely your tax preparer will instruct you to check the status of your refund online.
Similarly, the IRS is facing a backlog in processing roughly 24 million tax returns. In spite of hiring 10,000 workers, the IRS doesn’t expect to catch up until the end of the year.
The IRS tax tip sheet reads: “The best way to check the status of a refund is online through the Where’s My Refund? Tool or the IRS2Go app.” Alternatively, you can call the automated refund hotline at 1-800-829-1954.
Myth No. 2: You can find your refund date by ordering a tax transcript.
Many taxpayers believe that a tax transcript shows the date you will receive your refund. But the transcript shows if the tax return was received, and if the IRS approved or sent the refund. It doesn’t show the date you’ll receive your deposit or mailed check.
A tax return transcript also contains other valuable information, such as your original Form 1040-series tax return (and other forms and schedules filed). Most people use it to verify income if they are applying for a mortgage or loan..
Myth No. 3: If the Where’s My Refund? website doesn’t show a deposit date, the site must be wrong.
The Wheres My Refund? tool at IRS.gov — and on the IRS2Go app — are updated daily, typically overnight. If there is no deposit date listed, it could mean your refund hasn’t been processed yet. IRS.gov details that most refunds are issued within 21 days, but the process could take longer. If the IRS needs more information to process your return, they will reach out via mail.
Myth No. 4: Where’s My Refund? must be wrong if the refund amount is less than you showed on your tax returns.
The IRS could reduce your refund if you owe money toward other obligations, according to IRS Topic No. 203 — Reduced Refund. This “tax refund offset” can be used to pay past-due child support, federal agency non-tax debts, state income tax obligations, or some unemployment compensation debts.
If Wheres My Refund? shows a more modest refund than you expected, you should receive a letter of explanation regarding the adjustments from the IRS.
Myth No. 5: If you get a refund this year, you shouldn’t adjust your withholding taxes for 2022.
Just because you were happy with your tax return this year and didn’t owe any money doesn’t mean you can expect the same when you file in 2023.
An increase or decrease in pay — or a major life event such as a wedding, birth, or adoption — could change your tax situation. You should review your withholding annually and make changes, if necessary, to avoid a surprise tax bill.
Remember, you can trust the Where’s My Refund? tool or the IRS2Go mobile app to have the most accurate, up-to-date details on the status of your tax refund.
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