Have you filed your taxes yet? According to the IRS, there are about $1.3 billion dollars that belong to taxpayers who did not file their 2017 taxes. That means about 1.3 million taxpayers have still not received the refunds that they are entitled to.
This year, the typical due date of April 15th was extended to May 17th because of the pandemic. Are you getting a refund? Great! But how long does it take to get the money?
Typically, the IRS needs about 21 days before issuing your refund. If it takes longer than that it can be frustrating but there are a few reasons why your tax refund is delayed.
Reasons why your tax refund might be delayed
There could be a valid reason as to why your refund is delayed. Some of these reasons might not be in your control, and in some cases, you’ll just have to keep waiting. Here are some reasons why you might not have your refund yet.
Still being processed
It might be hard to wait for your return, but it’s important to allow some time between the moment you file and the moment you actually receive your refund. This waiting period allows time for your tax return to process.
After filing taxes during the pandemic last year, millions of people experienced delays and waited longer than usual for their refunds due to processing delays. For example, if you submitted your taxes via mail, it likely took about six to eight weeks to receive your return.
Combine that timeframe with the 21 days it can take for the IRS to issue your check on top of another six to eight weeks to receive your return. That’s about four months altogether!
Unfortunately, this circumstance is out of your control. However, you can continue to track your refund using the Where’s My Refund feature on the IRS website or by downloading the IRS2Go app to get updates and stay in the know.
Verify your direct deposit
When filing your taxes and choosing to be paid via direct deposit, it is important that you verify your routing and account numbers. If you find that you inputted the information incorrectly, it is important to contact your bank immediately.
Once filed, the IRS can not change your account information. If you have already contacted your bank and they aren’t able to help, you can try filling out a special form known as the 3911 Form. From there, the IRS will contact your bank on your behalf.
Does this sound like a bit of a process? Well, it is! But the sooner you act, the sooner things can be resolved. Mistakes happen, but as a best practice, always double-check your information to avoid submitting errors, like duplicate characters or transposed numbers. This extra step of caution before filing can save you time, frustration and avoid unwanted delays.
Change of address
It is important to update your address with the IRS when filing your taxes. It might not seem like a big deal because you’re filing online, but important information could be sent to you in the mail. Failure to keep your information updated can further delay your refund.
For example, the COVID-19 stimulus packages were sent via an economic impact payment (EIP) card. The IRS would have used the address they had on file for you, and if that address was incorrect, you would not have received your EID card.
Many people did not receive their stimulus checks because they had incorrect addresses associated with their names, causing a delay in funds. In some cases, certain people did not receive their funds at all. Notify the IRS of any address changes immediately.
Information is incomplete
Missing a number or forgetting to complete a box on your forms can result in a delay regarding your tax refunds. Some common errors include failing to add all of your W2 forms, incorrectly calculating deductions, entering your income on the wrong line, or mailing your tax forms with inadequate postage.
Ensuring that you fill out your information accurately is an important step in order to receive your refund on time. Most online filing services will check your returns for accuracy to confirm that there is no missing information.
Though most sites charge a fee in order to use them, the fee is probably worthwhile because it offers an added layer of protection against missing information. Also, make sure all of your tax information is accessible when filing your taxes on your own. It can help you reduce the risks of inputting incorrect information when your documents are in reach as you file.
You claimed on someone’s taxes
Have you filed your taxes only to receive a message that says you’ve been claimed by someone else on their taxes? If you are claimed as dependent on someone else’s taxes, it can cause a delay in your refund and impact the amount of your return as well.
A dependent can be a son, daughter, step-child, or even a sibling. If you expected to be claimed as a dependent, hang tight and know that your refund is on the way. If you are not expecting to be claimed as a dependent, learning otherwise could be indicative of fraud.
In order to claim someone as a dependent, you’ll need their name, Social Security Number, and their relationship to you. Sometimes, when data breaches happen, it is possible that your private information will be exposed online. If that is the case, you’ll want to notify the IRS immediately.
You can always request a copy of fraudulent taxes filed under your name. It’s also beneficial to take steps towards checking your credit report just in case your identity has been stolen.
What to do if your tax refund is delayed
If you realize your refund is delayed and you’re not sure why or what to do, follow these steps.
1. Track your refund
You can track your refund using the Where’s My Refund feature or downloading the IRS2Go App. These are the two best ways to stay updated in regard to your refund information. The site is typically updated every night.
In order to track your refund, you will need to provide your SSN, filing status, and the exact amount of your refund. Usually, you’ll get a notification that your message has been received, which means that the IRS is now working on processing your tax return.
You might also receive an approved message, meaning the IRS has processed your return and confirmed the amount of your refund. From there, a third notification will inform you that your tax return has been sent, meaning your payment is on the way either via check or direct deposit.
2. Call the IRS
If you check the Where’s My Refund feature, you might notice that you’ve received a message telling you to contact the IRS directly. This might happen in situations where information needs to be verified or missing. It’s also possible that your information might require further review.
This can happen if you’ve suffered from identity theft in the past. Contacting the IRS right away is the best way to get more information on why your tax refund is delayed. Keep in mind that the IRS will not be able to help you if you are not asked to contact the IRS directly but decide to call them regardless. The IRS phone lines are always busy, so only call if instructed.
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3. Verify your direct deposit information
Did you input the correct account numbers and routing numbers? Are you referencing the right bank account? Make sure you input your information correctly or else you could be waiting around for a tax refund that never arrives.
Also, be mindful of how many refunds are set to be deposited into your account. No more than three electronic refunds are allowed to be deposited into a single bank account. If you exceed those three refunds, you’ll receive a notice as well as a paper check rather than a direct deposit.
4. Make sure your identity has not been stolen
Your refund can be delayed if your identity has been flagged as stolen. This measure is put in place to ensure that someone else does not receive your refund on your behalf, whether that’s on purpose or by accident.
Though it can be frustrating, the delay is put into place so that the IRS has time to verify your information. You will likely receive a notice in the mail, but it is a good idea to check your credit report to make sure there aren’t any fraudulent accounts that were opened in your name.
If there are, it is a sign of identity theft or fraud. Remember that the IRS would never call, text, or email you asking for your Identity Protection Pin. If you receive a call, text, or email requesting your personal information from someone claiming to be the IRS, do not respond, and most importantly, do not provide them with any information.
5. Check your mail
Expecting your refund to arrive via direct deposit but still haven’t received it? Check your mailbox. It’s possible that a mistake occurred and you were issued a paper check in place of a direct deposit.
Not to worry! You can still deposit the check into your bank account as long as the name on the check matches the name on your account. Deposit the check into your account right away. You can expect the funds to clear within ten days.
Don’t worry! Your money is coming
Your refund might be delayed, but being diligent and taking these steps can help you get your money sooner than later. And once you receive your tax return, you might be wondering, “Well, what do I do with this extra cash?”
There are a lot of options! Maybe you can use the unexpected income to finally start investing. MoneyLion makes investing easy. With no management fees, you can decide how risky you want your investments to be by personalizing your portfolio.
Now is the time to start investing in your future, and MoneyLion has made it simple. Tax refunds can be a pleasant surprise and a great way to jumpstart your financial goals!