Posted on November 1, 2013May 31, 2016 by Jan Roberg

Tax Refund for Christmas 2013

Photo by B Rosen at Flickr.com

If you normally use your income tax refund to pay for your Christmas presents, listen up. You’ve got a problem.

First, nobody is doing Christmas loans. Remember when H&R Block and Jackson Hewitt used to provide loans against your refund? Then the IRS changed the “debt indicator” which made it almost impossible for anyone to offer those loans. A few companies provided Refund Anticipation Loans, (the loans where you got your refund in 1 or 2 days instead of two weeks) but they were few and far between. Most people had to wait for two to three weeks to get their refund.

Now the IRS has announced that tax filing will be delayed—meaning that instead of accepting tax returns on January 21^st like they had previously announced—they won’t accept returns until January 28^th, and maybe not until February 4^th.

What does this have to do with Christmas? Well, if you’re putting holiday gifts on your credit card in the hopes of paying it off with your tax refund—you’re not getting your refund until mid to late February at the earliest. If you can’t afford to pay your credit cards without your tax refund—you’ve got a problem.

So what other options do you have? For some people, if you know that you’re going to have a refund on your taxes, you can change your withholding now so that you get more money in your paycheck. If you’re reading this in October or early November, you’ve got a chance to put away some extra cash for presents. If it’s already December by the time you see this—it’s probably too late.

Here’s something else you need to know. If you have your taxes done by one of those corner shop tax companies, they will gladly take your money and tell you that they’re filing your return. You might think that you’re filing on January 3 or 4^th, but you’re not. What they’re doing is “stockpiling” your return. They hit a button, it gets sent to a big corporate server, but it just sits there until the IRS says they’re accepting returns.

Why is that important to know? Because people think that they need to file early to get their refunds. But those early returns are often wrong. They’re missing information, or the software’s not fully functional yet. The IRS needs time to work out the glitches and if the IRS is having glitches, so are all the other tax companies. If you have the big green tax company send your tax return to their server and then you discover a problem with it, you can’t take your tax return back. It’s too late. And if your tax return is sent in with a mistake it could delay your refund for weeks, or even months.

There aren’t a lot of options out there for using your upcoming tax refund to pay for this year’s holiday gifts. But you know what? Christmas comes every year. Every year! Once you do receive your refund, it might be the only time in the whole year that you’ve got extra cash. Take some of your refund money and stick it in the bank so you’ve got cash to pay for your 2014 Christmas. Seriously, you never want to be dependent upon the IRS for you to have a Merry Christmas.

Posted on May 21, 2010June 12, 2016 by Jan Roberg

Where’s My Tax Refund?

After you file your tax return, you should have your refund within 21 days. Often, it’s faster than that, but not always. Here’s how to check on your refund.

First step: 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. Yes, that sounds like a “duh” sort of statement, but you’d be surprised how many people can’t seem to see that they’ve already gotten their refunds in their account.

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 (RAL) or Refund Anticipation Check (RAC). 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. There’s usually a two or three day delay between when the IRS says they issued the refund and when you actually get it from a service like this.

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 persistent, 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.

Posted on March 10, 2010June 11, 2016 by Jan Roberg

Unclaimed IRS Refunds

The IRS won't tell you they owe you money.

If you want the IRS to give you a refund, you’ve got to file a tax return.

Updated June 11, 2016.

One thing you might not know about the IRS is that if you don’t file a tax return, they prepare one for you— whether you ask them to or not. Surprised? Well you shouldn’t be. They take the information documents that they’re sent, like your W2s, and then they compute your taxes using the worst possible filing status. If it comes out showing that you owe, then you’ll get a letter telling you to pay up.

But what happens if they find out that you should be getting a refund? Well, nothing. They don’t send you a letter saying, “Dear Sir: Even though you’re too lazy to file your income taxes yourself, we’ve done them for you and we want to send you a big, fat refund!”

Right now, the IRS has data showing that there is close to $1 billion of unclaimed income tax refunds out there. If you’ve got a refund coming, and you don’t file your return within three years of the due date, you lose out on that money forever!
But why bother? How much money are we talking about for one person? Of the people who have refunds coming across the nation, the median refund is estimated to be $718. But that’s based upon the IRS doing your taxes. You could, in fact, be owed much more.

For example: let’s say you are a divorced mother with two school-aged children and a mortgage. When the IRS does your return, they compute your taxes based upon you being single, taking a standard deduction, and having no children. In a case like this, that $718 refund could be worth over $4,000!

So how do you know if you’ve got money coming? You know what they say, you can’t win if you don’t play. Same with taxes, you can’t get a refund if you don’t file!