Tax Day is over for most of us but some taxpayers are still looking for their refunds.
Statistically, the IRS has processed refund requests at a faster pace than last year (101,176,000 refunds issued as of last week’s report compared to 101,082,000 for the same time period in 2013). Even so, taxpayers who haven’t yet received their refunds have expressed frustration at the wait with some reporting to me that returns which were filed as early as February have still not resulted in cash in hand.
So what gives? There are a number of reasons why refunds might be delayed.
One common reason is human error: transposition of numbers, old addresses and bad account information. The easiest way to prevent those errors is to be sure to double-check your return before you file it in order to speed processing.
If you’ve moved, you need to file a federal form 8822, Change of Address with IRS: allow plenty of time for processing.
If you changed your name because of marriage or divorce, you can notify IRS using the same form (8822). It’s important to also notify the Social Security Administration of the change so that your name matches on both records: if your name is different on your tax return than on your Social Security Administration records, it could delay the processing of your return. Additionally, if you originally filed a joint tax return and you and/or your spouse have since established separate residences for any reason, you both should notify the IRS of your new addresses.
It’s also important to make sure that your direct deposit information is correct. The account information on your tax form should match your personal information: it should not be directed to a third party, including your tax preparer. It’s important to note that some banks won’t allow you to direct deposit joint tax refunds into individual accounts or into check or share draft accounts that are “payable through” another institution. Finally, your account should be an actual checking, savings or similar account at a qualifying financial institution: refunds cannot be applied to credit cards or deposited into accounts at non-qualifying financial institutions.
If your refund is refused at the bank because of bank policy or because the account or routing number is bad, the result can be a delay of up to ten weeks after the refusal. The IRS will then attempt to deliver your refund by mail in the form of a paper check.
Your refund might also be delayed or reduced due to offset. Offset occurs when you owe money for a federal or state obligation. Common examples include student loans or outstanding child support obligations. You should receive notice if your refund is subject to offset but there have been complaints that notice has not been provided – especially for very old debts. And be careful: even if you aren’t personally liable for the obligation, your refund may be affected if you file a joint return (if that’s the case, consider filing separately in the future or apply for injured spouse relief).
Read More At Forbes.