The tax season has clashed with the process of sending out the third stimulus check and the IRS is handling both. So you could experience a delay in getting your tax refund for 2020. But there are ways you can track it if it is on its way. Also, get to know if things have changed since the last time you filed your tax returns.
It is the biggest ever stimulus payment exercise that the US has seen and the tax authorities are neck-deep in the process. This has disturbed the normal tax return from this year. If you have filed your tax return for 2020, you should be expecting a refund. But your might be delayed as the IRS rushes to complete the process of sending out the stimulus payments.
But if you haven’t filed your returns, be sure to do so before the May 17 deadline. You can verify your status, and begin the process of tracking your payment, as early as one day after filing your returns. And there are a couple of ways to do it. Further, if you have paid taxes for unemployment benefits, the IRS will start the refund process for eligible recipients in May 2020.
The Difference Between Tax Return And Tax Refund
The two terms might seem similar but are quite different, though they both deal with the same issue; your taxes.
You file your tax returns every year with the IRS, detailing your AGI, the Adjusted Gross Income, that is your total gross income less certain expenses. There is other financial information that you will need to enter. There are expense details like the amount you paid as student loan interest, home office expenses, health insurance coverage, and business expenditure, charitable donations, plus several other expenses.
A tax refund is issued by the IRS if you have paid more than you have to by way of federal or state taxes. For instance, you paid more in your quarterly tax estimates or your employer withheld more than the actual from your salary. The IRS will return the excess amount as a lump sum. Deductions made on your taxes will add to your refund amount.
There are a few differences for tax filers for this year. The first obvious difference is the deadline, May 17 instead of April 15. This was done to factor in the third stimulus payment.
Other changes for the 2020 taxes filed this year include the changes in the standard deduction ($12,400 for single and $24,800 for joint filers). There are also deductions of $300 max for qualifying charities.
Ways To Track The Tax Refund Position For 2020
To smoothen the process of filing, make use of the online tools. This will help both you and the IRS. The IRS has requested people to desist from sending the returns on paper. Sending in a direct deposit is also helpful in speeding up the return process.
Keep several pieces of information together to access your tax refund status. This includes the Social Security number, filing status (whether you’re single, head of household, or married.) you will also need to enter the refund amount entered on your return.
Use the ‘Where’s My Refund,’ tool. You will need to enter the ITIN or your Social Security number, plus your status and the exact amount to be refunded. Once you enter to send, you will be directed to the page displaying the exact status. But, you will be instructed to check the personal data entered and re-enter it. You will also have to enter the day you filed the returns and the mode of return, whether you have filed on paper or online.
The IRS also has a mobile tool, ‘IRS2Go’ that will give your tax refund position. The status is updated each day by the IRS, check the next day if you do not see a change in the status of your tax refund.
Making Sense Of The Tax Return Status
Your tax return status will be shown in one of these three messages on your online tool (including the mobile app).
If the IRS tool displays ‘Received,’ it indicates that the IRS has received your return and they are processing it.
If your status is ‘approved.” It shows that the IRS has already processed your tax returns and if you are owed any return, they have confirmed the exact amount.
Finally, if your status indicates ‘Sent,’ your tax return has been sent and you should receive it in your bank through direct deposit.
Be sure to check on the address and other details with the IRS. Update the same immediately so things do not get mixed up due to incorrect information.
When To Expect Your Tax Refund
A maximum of 21 days is the normal timeline within which the IRS issues nearly all tax refunds. But the process usually takes much less time and you can expect your money in your bank earlier. But things will naturally get delayed this year as the process of sending the third stimulus payment is at its peak.
The IRS wants to go easy on the process rather than commit errors that could lengthen the whole process of the tax refund. It is the same for those who have filed for the Child Tax Credit or an earned income tax credit. You should get a text message or an email from the IRS after you have filed your returns telling you your final refund amount.
How you file for the tax refund will also influence the date by which you receive your tax refund. After the IRS sends the refund to your bank through direct deposit, your bank may delay updating your account by as many as five days. So if the tax authorities have taken 3 weeks to send the refund to your bank, and they should take another 5 days, it will be 26 days before your account will reflect the tax refund amount.
But the whole process will be delayed a lot if your tax refund arrives by mail. it could be as long as 8 weeks before you lay your hands on the check.
What If Tax Refund Does Not Arrive By The Latest Date
The IRS resources are already stretched and so you will not get much help if you call up their helpline number at this stage. At best you will get through after a rather long wait.
But you should call up the helpline number if it is more than the 21 days given by the IRS as the time taken to process your tax refund. Or call up if that is what the IRS tells you to do through their online tool ‘Where’s My Refund,’ Add to that the number of days it will take for the bank to update your account.