Tax Refunds - Tidbits for Taxpayers
Many people dread tax time, but it can be even more frustrating if you have to wait longer than you’d hoped for your refund. Unfortunately, the Internal Revenue Service (IRS) is warning that patience may be necessary this year. For one thing, identity theft and tax refund scams have become significant concerns, so the IRS is taking extra measures to spot fraudulent returns. The IRS is also required to hold refunds for returns claiming the Earned Income Tax Credit and the Additional Child Tax Credit until mid-February.
You can help prevent any additional delays by ensuring that you’re ready with all the necessary documents to file your return, including Forms W-2 and 1099 reporting your income, and all the required receipts and other paperwork to ensure you qualify for your deductions or credits.
While getting a refund is a nice part of tax season that many look forward to, give some thought as to whether it is the best financial move for you. The refund reflects money that you overpaid during the year that the government is holding, so you are not receiving interest on those funds during that time. However, if you are more likely to use that refund to pay down debt or take other steps to improve your financial picture, then it may be a good option.