It’s almost refund time! (We’re sure your tax clients haven’t noticed.)
With the President’s Day rush in the rear-view mirror, filing season is officially on the downhill sprint to April 15. It also means that many early filers—including those claiming EITC and ACTC—will soon start receiving refund checks. For straggling procrastinators, the IRS says there’s still time to take steps to ensure a speedy refund process.
Two recent IRS press releases aim to make it simpler for all taxpayers to get any refund they’re due as quickly as possible. After all, so many households depend on the money coming from a refund check.
Direct deposit can get taxpayers their refund money faster.
In Tax Tip 2020-26, the IRS pointed out that direct deposits are the fastest way to receive a tax refund once the Treasury makes the money available. They even put together a top-ten list to help convince taxpayers who might have a more old-school approach to their tax refund:
While direct deposit is the best way to quickly get your hands on a tax refund, there are a few security-related strings attached. The “Direct Deposit Limits” page on IRS.gov notes that then-emerging data security threats forced the IRS to “limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three.” Anything beyond that number will be sent to the taxpayer as a physical check.
The “Where’s My Refund?” tool lets taxpayers know when to expect their tax refund.
Choosing direct deposit doesn’t necessarily mean enrolled taxpayers will receive their refund instantly. The IRS says the “Where’s My Refund?” tool was developed to help taxpayers track the status of their refund. (It’s essentially the refund equivalent of a shipping companies’ package-tracking service.)
After setting up an account with a Social Security Number or ITIN, the IRS paints a pretty straightforward user experience: “Taxpayers can use “Where’s My Refund?” to start checking on the status of their return within 24 hours after the IRS acknowledges receipt of an electronically filed return or four weeks after the taxpayer mails a paper return. The tool’s tracker displays progress through three phases: (1) Return Received; (2) Refund Approved; and (3) Refund Sent.”
Sources: Tax Tip 2020-26; IR-2020-45; Direct Deposit Limits
