Still Don’t Have Your Refund?
Tax season was finished over a month ago and I’m still hearing questions about refunds. Hopefully this will provide a few answers.
The quickest and easiest way to check on your refund is through the IRS website. Go to www.irs.gov and click on the “Where’s My Refund?” icon. You will need your social security number, your filing status (single, head of household, etc.), and the exact dollar amount that your refund is supposed to be for. You must have that information to get any kind of an answer.
From there, you’ll know whether or not your refund has already been sent, is still being processed, or if there’s something else holding up your money. A common example of that would be if you owed back child support and the state stepped in to take your federal refund to cover it. If you owe more than what your refund is for, then you won’t be seeing any of that tax money. If you refund is for more than the amount of the debt, you will eventually get the remaining balance, but it will take several weeks before you see it.
Let’s say that you don’t have an outstanding debt, and the IRS site says that you’ve already received your refund. Then what do you do? First, check to see if it was direct deposited into you account. That happens to be quite common. Be sure to check your bank statements before you ask the IRS to put a tracer on your refund.
And yes, if you did not have direct deposit but were expecting a check, the IRS can put a tracer on it. They can tell you where it was mailed to, if it was cashed, etc. They can even reissue the check if it was lost (after a specified period of time and some paperwork.)
One thing the IRS can’t help you with is a Refund Anticipation Loan. Let’s say you had your taxes done at a place that offers you a “bank product”, either they give you a loan against your tax refund or they take their tax prep fees out of your refund. Instead of getting your money directly from the IRS, you’re actually getting it through a third party-usually a bank that has an agreement with the tax company. If your refund is to be direct deposited into your bank account, then everything should be fine.
Sadly, many people who use that type of service don’t have bank accounts, and they pick up their checks directly from the tax company. If you had your taxes prepared on April 15th and expected to receive one of those checks, you could have been in for a rude awakening when you went to get your refund check on the 17th and found the tax office to be closed. In fairness, your big national companies will have an office open someplace,and someone there should be able to find your check for you. It just might take some hunting to find the right person to help.
Then, there are those companies that just completely shut down. That’s a little scarier. (Okay, a lot scarier.) Even though your tax preparer completely disappeared, all is still not lost, because he had to work with a bank in order to process your refund. A little detective work through your papers should get you a name and phone number of the bank processing the refund and connect you with your money. To be honest, it’s an agonizing process-computerized answering machines, being on hold for ages, “that’s not my department” answers, etc. You have to be pretty persistant, but you will eventually get your money.
In general, it’s best to put as few layers between you and your refund as possible, and you’ll be less likely to be hunting down your refund long after it’s due.
Garage Sales
I drove down the street this morning and saw the signs, “Neighborhood Garage Sale, this weekend!” While a robin may be the first sign of spring, to me a garage sale is the first sign of summer. Garage sales are full of so much promise. Whether it be the hope of some extra cash or the fantasy of a clean basement, garage sales have a happy, summery feel to them.
And taxwise, they’re almost never counted as taxable income. That makes them double good in my book. Let’s face it, everything you’re selling at your garage sale is going at a loss. Really. That baby stroller you paid $90 for but are trying to sell for $15-it’s a loss. The $50 pair of jeans that looked so good 20 pounds ago that you’re trying to sell for $10–loss. Since you can’t claim personal losses on your tax return, it doesn’t even get reported.
{Okay, tax technicality: if you sold those items for more than you paid for them, then you should be reporting the sales and claiming the profit as taxable income. But seriously, nobody in my neighborhood is making a profit on their old junk.}
So why am I even writing about garage sales in a tax column? Because after your sale, you pack everything left over into a package for the Goodwill, right? Of course! Otherwise your basement will be a mess again. So here’s my point, when you do that, write down what you packed up and list the prices you put on everything. That way, you’ll have a list of your donations which you’re going to need at tax time.
Too busy right now? Just take a few pictures with your digital camera. Then you’ll be able to look at them when you really need that list for your 2010 tax return. Trust me, come next February, you’re not going to remember what you sent to the Goodwill in May.
So now you’ve got a triple good: non-taxable income, a clean basement, and a tax deduction all rolled into one summertime event. How can anybody not like a garage sale?
For more inforamtion about no cash charitable donations, check out Money Blue Book’s website:
http://www.moneybluebook.com/how-to-value-your-clothing-donations-and-get-a-tax-deduction/comment-page-1/
You’ve Been Audited
Every year people ask me, “What can I do to prevent being audited by the IRS?” The honest answer is, “Absolutely nothing.” Because in fact, everyone is audited every year. You just don’t know it. Every year, your tax return is run through a computerized audit. First there is the search for missing documents—such as an unfiled W2 form or interest statement. Then there’s the DIF score, it’s a process where the IRS basically checks “what’s normal” for expenses for taxpayers in various income brackets.
When a return is tagged by the computer, then a human being takes a look at it. A return that gets snagged by the computer may still not be audited if it makes sense to the human. If the human still has a question, then an audit letter goes out.
Even people who don’t file tax returns are audited. The IRS runs the documents about your income even if you don’t file a return. If they determine that you’ve earned enough income to file, rest assured, you’ll get a letter about it.
Now I bet you’re wondering, “How do I get my hands on those DIF scores so that I can keep my return from being pulled for audit?” Yeah, I’d like a copy of those too. Unfortunately, the IRS doesn’t publish them. That would be like showing your hand in a poker game.
In the meantime, your best defense is hanging on to your records. Now that tax season is over, make sure that you’ve put all those papers someplace safe. Hopefully, you won’t need them.
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