Why is my tax refund being held up?
While everyone likes receiving their tax refund on schedule, there are a few circumstances that may cause a return to be delayed. We'll look at some of these causes to help you understand what can cause your tax refund to be delayed.
If you are one of the few people who still submit their tax returns on paper, you should be aware that the IRS takes longer to process those forms since they must still enter them into their computer system. While the vast majority of returns can be filed electronically, certain tax credits and conditions need physical filing.
If you are qualified to file electronically, we encourage that you do so. Affordable accountants in London can create your taxes and either e-file them or provide you a PDF that you can print, sign, and mail in. We've got you covered no matter which manner you choose (or have to) file!
Information that is inconsistent
The IRS compares the information you provide to what they receive from other sources and what they have on file for you from past years. This includes your full (legal) name, social security number, address, date of birth, and all information about other people on your returns (spouse, children, dependents, etc.). If the information on your return is inconsistent, the IRS may investigate further before providing your refund. After all, one of the IRS's key tactics for combating tax refund fraud is cross-referencing your information across many sources.
One of the key causes of late returns is incomplete returns. Frequently, you will fail to submit a required form or schedule, which will result in the IRS sending you a letter stating that your return is incomplete. It could be as easy as a supporting schedule, or it could be a little more difficult, such as a lender forgetting to send in your student interest statement to the IRS (or sending it in with an SSN that doesn't match yours).
In other circumstances, someone may have sent a 1099-MISC to the IRS, but you did not receive a copy for whatever reason, so you did not include that income on your return. The quickest method to resolve these concerns is to file an amended tax return as soon as you become aware of the situation. If the IRS found that your return was incomplete for whatever reason, Cheap accountants in London could assist you in filing an amended return.
Filing Too Soon
The IRS normally begins accepting returns in late January (the date varies from year to year). If you file your return before that date, the IRS may reject it.
Theft of Identity
Waiting too long to file might often be worse than filing too soon. As you may have heard, identity theft involving tax returns is a rising problem for the IRS. Identity thieves may frequently file your return on your behalf and route your tax refund (sometimes overstated) to their bank account. The IRS has safeguards in place to assist prevent fraudulent submissions, but if those safeguards fail, the IRS will bar someone from filing another return under that identity in the same year. So, if an identity thief files your return before you, the IRS will block your lawful refund until it can conduct an investigation. The IRS will issue you your refund once your case has been resolved; however, this might take anything from a few weeks to a year or more.
Another reason to avoid using pen and paper for filing is that any errors (whether simple arithmetic or forgetting to include a line from another schedule) will prompt the IRS to demand you to fix your return. In some circumstances, they will recommend a remedy for you, whilst in others, they will just require you to file an update. Taxes are never fun, and waiting for your refund can be exasperating. However, information is power, and understanding the most common causes can assist you in avoiding errors. Having a professional do your taxes for you, or at the very least using tax software and submitting early, can often assist you avoid postponing your refund.
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