What you need to know about tax refunds

What you need to know about tax refunds

As the next tax season approaches, the anxiety about receiving the corresponding refund increases more and more every day, however, the Internal Revenue Service (IRS) warns taxpayers not to expect on receiving their refund on a certain date, especially if they rely on this refund to make important purchases or pay bills.

Just as each tax return is unique and individual, so is the refund of each taxpayer. This is why it's important not to despair if acquaintances, friends and family get your tax refund before you do.

While the IRS issues most refunds in less than 21 days, a particular taxpayer's refund may take longer. Some tax returns will require additional review and processing will take longer than others. This may be happen when a return has errors, is incomplete, or is affected by identity theft or fraud. The IRS will contact the taxpayer by mail when more information is needed to process the return.

When using the tool Where is my refund? taxpayers can check the status of their refund within 24 hours after the IRS received their electronically filed tax return or four weeks after mailing it. This tool gives the taxpayer a personalized date after the IRS processes the return and approves the refund.

Year-end bonus, holiday pay, and temporary work may affect the refund

Several financial transactions, especially those that occur at the end of the year, can often have an unexpected tax impact. Examples include year-end and vacation bonds, stock dividends, mutual fund and equity capital gain distributions, bonds, virtual currency, real estate, or other properties sold with profits.

Taxes must be paid as income is earned or received during the year, either through withholdings or estimated tax payments. If the amount of income tax withheld from wages or pensions is not sufficient, the taxpayer may have to make estimated tax payments.

Taxpayers, whose 2019 federal withholding tax unexpectedly does not meet their tax liability for the year, can still make an estimated quarterly tax payment directly to the IRS. The deadline for making a payment for the fourth quarter of 2019 is Wednesday, January 15, 2020.

The Withholding Tax Estimator, available at IRS.gov can help taxpayers ensure that they are withheld the correct amount of tax from their pay. For anyone who is at risk of a surprise at tax time, making an estimated or additional tax payment soon is the quickest and easiest solution.  Form  1040-EN, available in IRS.gov, includes a useful worksheet for calculating the correct amount to pay. This form also includes key tax changes and federal tax rate programs for 2019.

Related: Taxpayers can get faster tax refunds with a Direct Deposit

File electronically and use direct deposit

Join the vast majority of taxpayers who get their refunds faster by filing electronically and using direct deposit. It's simple and safe. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

Taxpayers select it as their refund method through their tax software and enter their bank account number and routing number. Or, taxpayers can inform their tax preparer that they want a direct deposit. Taxpayers can even use direct deposit if they are one of the few people who still file a paper return. Be sure to verify your account information to avoid errors.

You can read the original note  on  the  IRS  website: Get ready for taxes: Important things to know about refunds