Tax Refund Tip: 3 Things That Could Help Get Your Money Earlier
In spite of the economic stimulus funds disbursed in 2021 and the advanced child tax credit (CTC), 2021 was a hard year for many, financially speaking. Further, the end of CTC deposits last year has created economic turmoil for many families. If you’re expecting a tax refund to help pay down debt, make rent, or even take a trip — you’ll want to do everything you can to quickly get your tax refund.
The tax filing period for this year officially opened on Jan. 24. However, the Internal Revenue Service (IRS) issued a statement in mid-January warning taxpayers that this year’s refunds could take longer than expected due to staffing shortages, additional filers this year who have not filed in the past, and an increased need for customer service due to the new programs in place (like the advance CTC and economic impact payments). Plus, the agency is still working through a backlog of tax returns and customer service requests from the past two years.
Fortunately, there are steps you can take to get your refund faster.
File Your Taxes Electronically (E-File)
Tax returns filed on paper and mailed in seem to go to the back of the processing queue when the IRS experiences a backlog. File your taxes electronically to jump to the head of the virtual line. The IRS offers multiple options to file electronically.
Taxpayers with an adjusted gross income of $73,000 or less can use the IRS Free File program. Programs like the IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) also offer free tax counseling and e-filing services for qualified taxpayers.
Taxpayers who don’t qualify for assistance and want to go the DIY route can use the IRS’ Free File Fillable Forms. Choose an IRS Free File provider through the IRS.gov portal and then create an account at the Free File provider’s website. Note that this account must be created by accessing the provider site through the IRS.gov portal.
You can also opt to use commercial tax software for your e-filing needs. Some commercial tax software packages offer help and guidance from tax professionals for a fee, which can be a good option if you aren’t sure if you’ll need a helping hand with your tax returns this year or not.
If you decide to hire a tax pro to help, be sure they are an authorized e-file provider so you can enjoy all the advantages of e-filing. Some authorized e-file providers can even issue your refund in the form of a prepaid debit card. Depending on your tax preparer, you may even qualify for a tax refund advance on a prepaid debit card, which can put money in your hands even before the IRS processes your tax return.
Direct Deposit Your Tax Refund
The IRS recently issued a news release stating that the fastest, easiest and most secure way to receive your tax return is to sign up for direct deposit. You can sign up to have funds deposited via:
- Checking account.
- Savings account.
- Prepaid debit card (as long as there is a routing number and account number associated with the card).
- Individual retirement account (IRA).
You can even split your deposit into any three accounts, the IRS detailed.
File Your Taxes Early, and Accurately
The sooner you file your tax return, the sooner you are likely to get your money. Of course, make sure all the information on your tax returns is correct, including information like your Social Security number and address.
Make sure you reconcile any advance CTC payments received with IRS Letter 6419, which you should have received by mail in Jan. 2022.
Taking these steps can help ensure you receive your tax refund in a timely manner. Of course, also remember that the tax deadline for 2022 is April 18 and if you owe the IRS any money, you’ll need to make your payment by that date.
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