If you’ve got a tax refund headed your way, you’re probably itching to get your hands on it as soon as possible. But plenty of speed bumps can cause the IRS to pump the brakes on delivering that precious pile of dough. Here are six to keep in mind this filing season.
1. Filing your tax return on paper
The IRS issues most tax refunds within 21 days, but that wait could drag on for a month or more if you don’t file electronically. There are two big reasons: First, the mail takes more time. Second, those paper documents take longer for the IRS to process. The IRS recommends not even bothering to check the status of your tax refund until four weeks after you mail a paper return, and IRS representatives can’t research the status of your refund until six weeks after you put it in the mailbox.
2. Asking for a paper check instead of direct deposit
Telling the IRS you want a paper check can slow down your tax refund because you’ll have to wait for the mail to show up. Get your money faster by having the IRS deposit your tax refund directly into your bank account instead. Just provide your account number and routing number on your Form 1040. You can also split your refund among up to three different accounts, such as investment accounts, IRAs, health savings accounts, regular checking or savings accounts. When you file your tax return, just add Form 8888 to tell the IRS how to divvy things up.
3. Reporting wages that don’t match what’s on your W-2
Your W-2 shows how much your employer paid you and how much tax you've already paid on those earnings. You’ll need to enter the information from your W-2 onto your tax return, but there’s a catch: When your employer provides your W-2, it also sends a copy to the IRS. So if the IRS notices that what you entered on your tax return doesn’t match its copy of your W-2, your refund could come to a screeching halt while the IRS waits for an explanation, according to Marc Schnoll, a certified public accountant at Sexton & Schnoll in Gainesville, Florida. “That's typically a data entry error,” he notes.
4. Claiming the Earned Income Tax Credit or the Additional Child Tax Credit
The Earned Income Tax Credit and the Additional Child Tax Credit can save you thousands of dollars if you qualify — but be prepared to wait longer for your refund. Thanks to people filing fraudulent tax returns claiming the EITC and the ATC, the law requires the IRS to take more time to verify some of the information on tax returns that claim those credits.
5. Not reviewing your teenager’s tax return
If your kid has a job and needs to file a tax return, be sure he or she checks the right boxes. Otherwise, you might lose out on some tax breaks, which could shrink your refund. “If they file before you and inappropriately claim that nobody else can claim them as a dependent, then that's going to block you from claiming that child,” Schnoll says. “That's going to be a problem as well.”
6. Incorrectly claiming dependents
If your ex files his or her tax return before you do and claims your child as a dependent, you could be in for a refund delay if you also claim the child as a dependent on your own tax return, Schnoll warns.
“Even if you're entitled to the deduction or the credits associated with that child, if your ex-spouse claims them first, it's going to cause a problem,” he says. “Your return will not be accepted by the IRS, and that will of course delay the refund. That happens fairly frequently.”
Your ex may need to amend his or her tax return to remove the child before you can file and get your correct refund, Schnoll says. “It's a battle that, frankly, the IRS doesn't want to be in the middle of."