Refund Checks: What You Should Know

When you pay more taxes than your actual tax liability, you are owed a tax refund. While most people rejoice after receiving a tax refund and view it as “free money,” the reality is that there was an error in calculating what you actually owe. Essentially, a tax refund is the excess money you paid, and the money you paid out is being returned to you.  

Am I entitled to a tax refund?  

If you overpaid your taxes during the year, you could expect a tax refund. Most taxpayers are employees of companies; therefore, most tax refunds result from too much money being withheld from your paycheck by your employer. This can happen because your company’s payroll department will base your withholding monies on estimates and won’t reflect each credit and deduction you are entitled to. 

However, there are other reasons why you may have ended up paying too much tax. Marriage, for example, impacts your tax bill if your spouse also receives an income.If there’s been an addition to your family, such as a birth or adoption, this should reduce the withheld amount. Changes in income also adjust your withholding. And if you don’t update your status to reflect these changes, your company will continue to take the same withholding amount.  

If you’re an employee and life events such as marital status or dependents mean an adjustment on your withholding, you can wait for the return, update your W-4 through your company’s payroll department, and wait for your refund. However, delaying updating your status also means missing other tax opportunities and benefits related to marital status and dependents. You should also remember that there’s a time limit to when you can claim your tax refund. For most taxpayers, the time limit is three years from the time you file the tax return or two years after paying the tax for that year.  

How do I request a tax refund?  

Filing your annual tax return is the only way to request a tax refund. Your tax return will report your income and other tax information, allowing the IRS to determine your tax liability and assess if you have overpaid.  

When do I get my tax refund?  

The IRS states that tax refunds will arrive 21 days after filing. However, delays have been known to happen, with some refunds taking up to 12 weeks. You can also check the status of your refund via the IRS website.  

However, the IRS may hold onto your refund if you have outstanding debts. Top reasons why the IRS may seize your tax refund include owing federal income taxes, state income taxes, and state unemployment compensation. The IRS may also take your tax refund if you’ve defaulted on your student loan, owe child support, or owe spousal support.  

How do I receive my tax refund?  

The IRS can deliver your refund via electronic transfer or paper check. According to the IRS, you will receive your refund faster by using their e-file system, which directly deposits your refund to your bank account.  

We advise filing your taxes on time to avoid delays in receiving your refund. At Golden Tax Relief, we know the workings of the tax system and can negotiate a solution that works for you. If you encounter tax problems, click here to request a consultation or call 844 229 8936.

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