Whether you are a small business owner or an individual living in New York having a job or a trade, profession aside, everyone is legally bound to pay their taxes. If you are a taxpayer, you must be familiar with the term tax refund. If you need to become more familiar with it, we’ll guide you right from the beginning.
Whether you are living in Brooklyn or Bronx or the county Queens, upstate near State Island or the high life in Manhattan, we at Tax King got the tools and expertise to help you with all your tax concerns and make your life easier.
What is Tax Refund? How to Get Your Tax Refund From IRS?
A tax Refund is an amount that the state government or federal government owes you because you have paid more than what you were legally required to pay. It is also known as a tax rebate. People often confuse “tax return and tax refund” with each other. However, they are both very different terms.
A tax return is a form or form filed with a tax authority such as the IRS or your state tax agency (New York, in this case) that reports all income, expenses, and other information related to tax. On the other hand, you get a tax refund when you pay more taxes to the state government or federal government than you owe.
According to the IRS (Internal Revenue Service), the average tax refund as of May 10, 2019, was nearly $3,000, which the IRS had to give back to the taxpayers. Often, a tax refund is a bonus or free money. However, that is only sometimes the case.
Why? Because, in actuality, it is just an interest-free loan that a taxpayer has given to the government, and in return, the taxpayer gets nothing more than the original amount. It is your own money, coming into your hand after a year. You can avoid it, and your hard-earned money will not go into other hands before returning to you. All you need to do is to consult a CPA or expert tax professional service such as Tax King.
Tax professionals such as Tax King have a life-long experience with the agencies such as IRS and State Tax agencies in paying taxes and dealing with all other legal matters. Experts in the tax field can improve your tax refund, get you all the money that is legally yours and have a better, more in-depth understanding of the IRS guidelines, which means better interpretations and accurate knowledge of how the taxation departments work.
Consulting such professionals can actually:
➡ 1. Improve your dealings with the taxation departments
➡ 2. Help you lower your tax liability by analyzing and studying your financial information.
➡ 3. I can give you financial and taxation advice all year long,
➡ 4. Assist you in finding the correct deductions, adjustments, and tax credits applicable to your situation.
➡ 5. Get your state tax or IRS tax refund fast with maximum amounts.
How Do Tax Refunds Work?
Tax refunds occur due to various reasons. Most commonly, it happens when you have overpaid your tax returns to the federal or state tax agency. In the case of employees, an over amount of money is withheld from their paychecks every week. It is because withholding only considers the tax but only sometimes considers every credit and deduction the employee will take. If you are frequently experiencing the tax refund scenario, you are overpaying your taxes every year.
Updating your W4 can reduce your withholding. All you got to do is file a revised W-4 form with your employer. How much federal income tax is withheld from your checks is primarily determined through the W-4 form. If you claim more allowances on the W-4 form, the withholding will decrease. Now the question is:
How Would You Know What Amount of Allowances to Claim so that the Resulting Withholding Matches Your Tax Bill?
It can be a complex calculation, but seeking professional tax expert advice is the right thing to do here.
Ultimately, this will increase the money you receive in each paycheck but will decrease or possibly eliminate your tax refund at tax time. In any case, a tax refund can be a hassle, and currently, it is taking longer than usual to receive the refunds due to the pandemic.
Due to the worldwide coronavirus pandemic, the IRS has increased the tax filing and tax payment deadline by 90 days; now, it is July 15. At times, the taxpayer is eligible for refundable tax credits, which reduce the total amount of tax that the taxpayer owes to the government.
What are Tax Credits, and How Do They Aid in Tax-Paying?
The tax credit is an amount of money allotted by the government to promote a specific behaviour in favour of everyone (govt. and individuals), such as using electronic cars instead of gasoline. Certain tax credits have specific values that usually depend on the type of credit. Tax credits are granted to individuals or businesses operating in a specific location where the government has applied for the tax credit.
Individuals and businesses working in a particular industry or classified by profession, degree or nature of work also get a certain amount of tax credit, as approved by the government. Most tax credits are not refundable; they usually reduce the tax liability but only provide cash if a tax liability is left.
Tax credits are usually of three types:
- Partially refundable
Refundable tax credits are given as cash to the taxpayers. To be eligible for tax credits, a taxpayer must meet the detailed and specific sets of qualifications that the government lays. These qualifications usually include particulars like income level, size of the family, occupation type, investment or savings type, currently earned income and other specific situations such as the location of the business or home.
How Will I Get My IRS Tax Refund?
You will be required to file your tax return to receive your tax refund owed to you by your state or the federal government tax agency (IRS).
Among other options, typically, a tax refund is made in the form of a personal check named to the individual or business, in the form of U.S savings bonds, or a direct deposit into the taxpayer’s bank account.
Usually, deposits are made 10 to 15 days after the taxpayer has filed the return, while checks take longer than that; they also get issued within a few weeks.
Some Key Factors that Decide When You Will Receive Your Tax Refund
- How early you filed for the refund?
- If you are also claiming certain credits (especially EITC and CTC)
- , the tax refund is filed through electronic file or sent by mail.
- Whether there are any debts to the federal government that the taxpayer needs to pay.
The Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) might delay your tax refund. Also, as per the IRS, taxpayers claiming credits cannot have tax refunds issued until mid-February to protect against identity theft and tax fraud.
It is usually safe that all the legalities are followed, and the taxes have been filed adequately if you hire a professional service like Tax King. Generally, as per the guidelines of the IRS, it is said that returns with refunds are processed and payments issued within 21 days. However, filing done via paper or mail can take much longer.
The IRS and tax professionals strongly encourage filing via email or the IRS web portal. The fastest way to get your tax refund is by filing electronically and selecting direct deposit as a payment option.
When Will I Get My Tax Refund?
If you are one of the taxpayers who have not yet received your income tax refunds, then you can use the “Where’s My Refund?” app to check the status. It is available on the IRS website.
Prerequisites for using the online “Where’s My Refund” application by the IRS website:
- Social security number or ITIN
- Current status of your filing (Single, Married, Head of Household, or Married Filing Separate)
- The exact amount of your refund.
Aside from that, a professional tax service can help you get your IRS TAX REFUND safely and quickly. Consult with Tax King and get your tax refund fast and with the maximum amount.
If you have submitted your tax refund filing online, wait for at least 72 hours before checking the status of your tax refund because the IRS website takes a reasonable amount of time to update.
Once your filing is accepted, you will also receive an email from the IRS. However, if you have submitted your tax return through mail, then as per the IRS, it will take approximately three weeks to check the status of your tax refund.
Note: The IRS can hold onto your refund if you have certain outstanding debts, for example, child support or student loan bills.
Paying any such debts on time will ensure that you get your entire refund on time.
Note: It is essential to realize that you have a limited time to claim a tax refund.
Usually, for most taxpayers, You must claim the refund within three years from when you initially filed the tax returns or within the next two years (24 months) of paying the tax, whichever is later.
Where is My State Tax Refund?
To check your state tax refund, just like IRS, you can go to the website of your state government tax agency. You will need the same things for this type of tax refund status check:
➡ 1. SSN (Social Security Number) OR TIN (Taxpayer Identification Number)
➡ 2. The exact amount of your refund.
➡ 3. Your filing status.
➡ 4. Sometimes, your ZIP code and the year of your return are.
However, tax refund processing is different among states; refunds are issued any time between a few days to a few months after submitting your return.
It is taking and may take even longer than usual this year if your state’s government closes offices due to the coronavirus pandemic.
To Avoid Delays in Your Tax Refund a Few Essential Things to Consider:
The IRS has provided a list of common taxpayer mistakes, including typos and spelling mistakes. If you have made typographical errors in your filing process, your tax refund might be delayed significantly. The errors include mistyping your SSN or your name.
The second type of error you need to avoid is a mathematical error or calculation mistake. If your tax return has inaccuracies and poorly calculated returns or deductions, then that would mean your refund will be delayed.
You can avoid it by consulting your taxation with a professional tax expert.
The filing status you mention while submitting for tax refund is essential; you must enter the correct filing status and only enter one status. Status such as Married, Widowed, Head of household etc., can cause delays in your tax refund if entered incorrectly.
Be sure to file your tax refund both early and early enough because the IRS Software is optimized for tax forms after a particular date, so sending it in too early can cause a delay. While on the other hand, sending it too late can add you to a swarm of taxpayers that the IRS will likely be delayed in processing. Always remember the fastest and most efficient way to get your tax refund is to file electronically and choose direct deposit.
How Do I Save Money Instead of Getting Large Tax Refunds?
It is possible to decrease the amount of the tax refund; the taxpayers can use the following one or more methods:
- Using the W-4 form, adjust the amount of tax that the federal government withholds from your paycheck.
Taxpayers are more often encouraged to do this in cases where their adjustments to income, exemptions, and deductions remain relatively consistent from year-to-year (meaning that they will spend and receive the exact amounts of money throughout the year). also, if the government is consistently required to give a larger refund.
- At times, some people are entirely exempt from state tax; in that case, they can check with their state income tax authority (New York – in this case) to see if there is a form that can be filled and filed, which would exempt them from state withholding their money.
- Verify and double-check some tax rates and adjusted gross income thresholds (this happens if taxpayers are nearing the bottom of specific tax brackets and some modifications have been made to the thresholds and tax rates)
- Another helpful tip is to take advantage of the medical expense deduction (that is applicable for medical expenses, it has now been imposed for tax years starting in 2013)
- Increasing the maximum amount allowed to save tax-free for retirement.
Some people increase their tax refunds, thinking of it as a savings account to get money back each year. One warning, though, if you are getting large amounts of tax refunds every year, then the IRS can get angry at you for not having correct withholding amounts, and you can get penalized for this.
What To Do With Your Tax Refund Money?
For free money, be more prudent once you receive your refund.
Treating yourself and spending that money on vacation might be tempting; however, if there are more important financial obligations that you have yet to fulfil, then being considerate here is the right thing to do.
The most important thing to do is to pay off your debts; experts suggest that staying clean of your debts can increase your cash flow and is one of the critical factors in making anyone rich.
Paying off credit card balances and managing debts should be your priority.
If your emergency fund is getting short on fuel, it is better to boost it up than spend money on entertainment. If you already have an emergency fund, it is better to use some of that money to help you reach your immediate financial goals. Consider your financial goals for the current and coming year, and use your tax refund to help you reach them.