2012 Refunds: What You Need to Know

Photo by Thowra_uk at Flickr.com

So what’s with the sloth?  Refunds are going to be late this year.  If you’re charging up a storm for Christmas and expecting to pay off your credit cards with your tax refund in January, you may be in for a rough go of it.  Here’s what you need to know for this coming tax season:

1. The first date that e-file will be open is January 22^nd, that’s already a little later than usual.  Couple that with the fact that Congress is still messing around with 2012 tax issues and that could hold up the filing season even more.
2. The IRS is no longer providing a refund schedule.  Instead, they are saying that most people can expect their refund within 21 days if they e-file, and longer if they mail in their return.  While there’s a possibility that some refunds will be faster, you can’t count on receiving any faster than 21 days.
3. Most refunds are expected to arrive within 21 days, but some refunds can be expected to take 75 days.  That’s not a typo, I said seventy-five days.

How will I know if I should expect a 21 day or a 75 day refund? Basically, if you’ve ever had an issue with claiming a dependent, or if you’ve had an identity theft problem, you’re going to fall into the 75 day category.  Let’s say your ex claimed your daughter on his return last year and he shouldn’t have.  You fought it and won.  This year, he tries it again.  The IRS snags his return and it’s held up for 75 days.  And that’s a good thing, he’s cheating on his taxes and this time it won’t work.

Here’s the down side.  You go to file your taxes the right way, but the sneaky ex’s return is already in the system.  Now you’re automatically flagged and your return is also getting held for 75 days also.  So even though you’re the good person doing the right thing, your tax return can be delayed for up to 75 days because someone else illegally tries to claim your child.

So, be prepared for a late refund and plan accordingly.