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5 Tax Refund Myths

2/2/2017

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In the early parts of tax season, many early filers are anxious to hear specifics about the status of their tax refunds. This can lead to misunderstandings and speculation about refunds.

Here are five tax refund myths that tend to come up this time of year:

Myth 1: All Refunds Are Delayed
Most federal tax refunds are issued in the normal timeframe – less than 21 days. Some refunds may be delayed – but not all of them. Recent legislation requires the IRS to hold refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. Other returns may require additional review for a variety of reasons and take longer.

Myth 2: Calling the IRS Will Provide a Better Refund Date
Many people think that calling the IRS can speed up their tax refund. In this case, the squeaky wheel does not get the grease. In reality, you’ll probably end up waiting on hold and getting nowhere. Your best bet is to check online through the “Where’s My Refund?” tool or via the IRS2Go app.

The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not give you new information. “Where’s My Refund” has the same information available to IRS telephone operators, so waiting on hold is a waste of time, unless you enjoy listening to on-hold music cutting in and out for what seems like forever.

Myth 3: Ordering a Tax Transcript is a “Secret Way” to Get a Refund Date
Ordering a tax transcript will not help you find out when you will get your refund. The information on a transcript does not necessarily reflect the amount or timing of a refund. While you can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation, it’s easier to use “Where’s My Refund?” to check the status of your refund.

Myth 4: Something Must be Wrong Because I Don't See a Deposit Date Yet
Where's My Refund? ‎on both IRS.gov and the IRS2Go mobile app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. If you’re claiming EITC or ACTC you will not see a refund date on Where's My Refund? ‎until then.

These refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27 — if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits. Taxpayers who have filed early in the filing season, but are claiming EITC or ACTC, should not expect their refund until the week of Feb. 27. Remember that President’s Day weekend may impact when you get your refund since many financial institutions do not process payments on weekends or holidays.

Myth 5: Refunds Claiming EITC and/or ACTC, will be Delivered on Feb. 15
By law, the IRS cannot issue refunds before Feb. 15 for any tax return claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). The IRS must hold the entire refund, not just the part related to the EITC or ACTC. The IRS will begin to release these refunds starting Feb. 15.

These refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27. Any additional review of your tax return will cause an additional delay.

Using “Where’s My Refund?”
“Where’s My Refund?” can be checked within 24 hours after the IRS has received an e-filed return or four weeks after receipt of a mailed paper return. "Where’s My Refund?" has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved, and (3) Refund Sent.

Remember, when using “Where’s My Refund?” or the IRS2Go app, you must have information from your current, pending tax return to access your refund information.
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513.272.8400
Cincinnati: 9624 Cincinnati Columbus Road, Suite 209, Cincinnati, OH 45241

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  • About
  • Services
    • Tax Strategy Network
    • Financial Planning
    • Accounting
    • Outsourced Accounting
    • Business Consulting
  • Individuals
    • Individuals
    • Real Estate Investors
    • Clergy
    • Business Owners
    • Professionals
  • Businesses
    • Small Businesses
    • Mid-Size Businesses
    • Real Estate Investors
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