Most taxpayers were required to file their tax returns by April 18 this year to avoid any penalty charges. This delay may have caused you quite a bit of stress, especially if you knew you owed money to the Internal Revenue Service (IRS). But some lucky filers look forward to tax season because they end up getting refunds, and sometimes quite substantial ones. It turns out that you might be entitled to another payday in this case, because the agency still owes some taxpayers more money. Read on to find out if you might have a larger payment coming your way.
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If you have already submitted your tax return but are still waiting for it to be processed, you are not alone. As of May 6, the IRS still had more than 9.8 million personal income tax returns not processed in its system, which includes returns received before this year and new 2021 tax returns filed this year. Of those unprocessed returns, “2.6 million returns require error correction or other special handling, and 7.2 million are paper returns awaiting review and processing,” according to the tax agency.
“This job does not usually require us to correspond with taxpayers, but requires special handling by an IRS employee. So, in these cases, it takes more than 21 days for the IRS to issue any related refunds and, in some cases, this work can take 90 days to 120 days,” the IRS said.
Although the IRS states that it issues most refunds within 21 days, the agency actually has at least 45 days to process your return and issue your refund before there are consequences. If the IRS misses this deadline, it is legally required to start paying interest on your refund.
So if you filed your 2021 tax return by the April 18 deadline of this year and you don’t receive your refund by June 2, the agency may owe you additional money in the form of interest. . And it’s not that rare. Theirs had to pay the taxpayers An additional $3.3 billion in interest last year due to late repayments, according to an analysis by the Government Accountability Office (GAO).
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Unfortunately, the extra money might not alleviate the frustration of waiting for a late refund. Bill Smithnational director of tax technical services for CBIZ Inc. and a former tax attorney for the U.S. Department of Justice, told CBS MoneyWatch that most taxpayers are likely don’t even realize the IRS pays interest on late refunds. “I would add that they probably don’t care that much because generally it’s not going to be a big number. The sooner they get their money from the government, the happier they are,” Smith told the new point of sale.
According to Marca, the interest is based on the short-term federal rateor 4%, in April 2022. So if someone waits more than 45 days for a tax refund worth $3,019 — which the IRS says is the average refund this year — they could receive an additional $120.76 in interest.
Or it could be even more important: on May 20, the IRS announced that it pay 5% interest on deferred tax refunds as of July 1, although this may not yet make much of a difference to taxpayers. “People prefer to get their refund on time. If you have $3,000 or $4,000 coming up, a few hundred extra dollars won’t do much,” Rob Burnettfinancial advisor and CEO of Outlook Financial Center in Troy, Ohio, told CBS.
There are a number of reasons the IRS could take longer to process your return, and the agency has previously warned that processing delays caused by the COVID pandemic have prevented the agency from obtaining the refund everyone within 21 days. According to CNET, some of the common reasons the reason your refund may be delayed could be because your tax return contains errors or is incomplete, your banking information is incorrect, you filed on paper, or you did not correctly apply for your dunning or credits child tax.
If you still haven’t received your refund and aren’t sure why it’s been delayed, you can check the status of your refund using the Where is my refund? tool on the IRS website. “The IRS warns taxpayers not to count on receiving a refund by a certain date, especially when making large purchases or paying bills,” the agency said.
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