If you file income tax returns, you’re likely expecting a refund. And, if you’re like most Americans, you’re anxious to get that money back. After all, it is yours.
When should you expect that money to hit your bank account? Here’s how to do everything you can to speed up the process and monitor your refund’s progress.
File the right way
When and how you file your federal tax return can make a difference in weeks or months for your refund.
Start by reviewing tips from the IRS to get a jump on your taxes. Even before you’ve received the documents you need to file, such as a W-2 from your employer and statements from your bank and brokerage, you can begin gathering the information you need. If you want your refund as quickly as possible, you’ll want to get a jump on preparing your return.
Although your tax return isn’t due until Tuesday, April 18, this year, the longer you wait to file, the longer it will take to get your refund. The IRS gets busier as the tax season rolls on, causing slowdowns. Procrastination can be costly.
Besides filing sooner rather than later, the best way to receive your tax refund as quickly as possible is to file electronically. It can take 6-8 weeks for the IRS to process paper returns, and every year some taxpayers who filed paper returns report waiting months for their refund.
The IRS’ eFile program typically begins accepting returns in late January. Although the agency hasn’t announced this year’s “opening day,” typically, that date is January 23rd or 24th. Taxpayers who file electronically have four options:
- IRS Free File for taxpayers with an adjusted gross income of $73,000 or less
- Free Tax Return Preparation from the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs for taxpayers who qualify
- Commercial Software (not free), such as TurboTax, H&R Block, and several others
- Authorized eFile Providers, such as accountants
Note that some commercial software preparers will offer short-term loans based on the amount of your refund, sometimes within minutes of your return being submitted. Make sure you understand any fees or interest charged for this service.
One more tip: make sure the IRS has your bank account information. Direct deposit into your bank account is much faster than waiting for a paper check.
Get your documents in order
Because you can’t complete your tax return without documents from your employer, bank, investment accounts, and other sources, it’s important to know when to expect them.
By law, your employer must mail your W-2 by January 31. Often, employers who provide payroll documents electronically may make your W-2 available online earlier. Most brokerages and banks must send tax documents by February 15.
Other tax documents, such as K-1s from certain types of partnerships, don’t have to be mailed until March 15. If you’re waiting on a K-1, you may want to prepare the rest of your tax return and then add that info when it arrives. You can also estimate the amount that will be shown on the K-1, file your return, and then file an amended return later if the actual K-1 amount differs from your estimate.
Track your refund
You’ve filed your return. Now the waiting begins. How long will you wait?
First, if you haven’t already, open an account with the IRS. It’s free, and you can find and track all sorts of valuable tax information, including your last five years of returns.
The IRS also has a site to track your refund here. The IRS predicts that your status will appear here within 36 hours of filing, though this can vary. Information is updated as your return is processed. The IRS also has an app, IRS2Go, that can help you track your return status.
You can also find information on tracking your state tax refund here. But, again, as with your federal return, filing electronically and providing bank information for direct deposit can significantly speed up the process.
Use your refund wisely
Your refund may seem like a windfall, but it’s really a return of your money. Get the most out of your tax refund with these smart money moves, so you won’t wonder, “Where did it all go?” in a few months. Whether you plan to get a tax refund or it comes as a surprise, having a strategy for how you will use the funds is always a good idea.
Final word
Filing your taxes can be a pain, but getting a refund is the light at the end of the tunnel. And luckily, there are things you can do to speed up the process and make sure everything goes smoothly. With a little preparation, you’ll have that much-anticipated money back in no time.
