It can be difficult to tell myth from fact when it comes to tax refunds. The IRS would like to help you by clarifying some tax return myths, and we are happy to help the IRS achieve their goal.
Let's start by clearing up the 5 top myths about tax returns as listed by the IRS.
Myth 1. Everyone's Refund Will Be Delayed – Some refunds will indeed be delayed because of the IRS crackdown on fraud related to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). Others will be delayed for typical reasons, including incorrect information, failure to sign forms, forgetting IRS ID PINs, or other submission errors. However, there is no blanket delay that will affect all taxpayers.
Myth 2. Calling Tax Professionals or the IRS is the Best Way to Check Refund Status – The best way to verify your refund status is through the "Where's My Refund?" portion of the IRS website. Information is updated daily. The same information is available at the IRS2Go app for mobile devices.
Myth 3. Ordering a Tax Transcript is a "Secret Way" to Find Out Your Refund Date – All that ordering a tax transcript will do is get you a tax transcript. Transcripts have nothing to do with your refund date.
Myth 4. "Where's my Refund?" Isn't Working Because It Has No Deposit Date – Patience, everyone. Where's My Refund may not show a deposit date yet if you're checking too early. Your tax form has to be processed first and your refund must be approved before a date can be assigned.
Myth 5. Delayed Refunds Claiming EITC/ACTC Will Be Delivered on February 15 – That's the first date of release for those refunds. It may take a few weeks for them to be received in bank accounts or mailboxes.
Enough with the myths; how about some facts?
Fact 1. The Average Refund Is Almost $2,800 – According to year-end IRS statistics, the last two filing seasons (2015 and 2016) had very similar average refunds — $2,787 for 2015 and $2,860 for 2016.
Fact 2. Total Refunds Are Over $300 Billion – Total refunds reached $317.6 billion in 2016, topping 2015's refund total of $306.1 billion.
Fact 3. Approximately Eight in Ten Refunds Are Delivered by Direct Deposit – Over 88 million of the 111 million refunds in 2016 were processed via Direct Deposit. The average direct deposit refund of $2,995 was slightly higher than the overall average refund.
Fact 4. The IRS Stopped Almost $6.8 Billion in Fraudulent Refunds in 2015 – At the end of 2015, the IRS reported that identity theft filters had prevented almost $6.8 billion in fraudulent tax returns. 2016 filing season statistics are not available, but by early March, Forbes reported that nearly $200 million in fraudulent returns had been prevented.
Fact 5. The Majority of Tax Filers Receive a Refund – Out of over 152 million individual tax returns filed in 2016, 111 million refunds were issued. That is roughly the same 77% of taxpayers as in the previous year.
Think about that last fact: over three-quarters of Americans paid the government too much and received the excess back as refunds in the next year. If your withholding is correctly balanced, you shouldn't owe the government anything at all. In other words, there's one sure way to have refund money in your pocket as soon as possible – don't overpay them in the first place.
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This article was provided by our partners at moneytips.com.
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