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.
And if you are a taxpayer, then you must be familiar with the term tax refund.
If you are not familiar with it, then we’ll guide you right from the beginning.
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?
Tax Refund is basically the 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 tax rebate.
People often confuse “tax return and tax refund” with each other. However, they are both very different terms.
People often confuse “tax return and tax refund” with each other.
However, they are both very different terms.
Tax return is a form or forms 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 all related to tax.
On the other hand, you get tax refund when you pay more money in terms of taxes to the state government or federal government, than you actually owed.
According to the IRS (Internal Revenue Service), the average tax refund as of May 10, 2019, was nearly $3,000 that the IRS had to give back to the taxpayers.
A lot of times, people feel like tax refund is kind of a bonus or free money.
Although that is not usually 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, which is in fact coming in your hand after a year.
This can be avoided, and your hard-earned money will not go in other hands before coming back 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 agency in paying taxes and dealing with all the other legal matters.
Experts in tax field can actually 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. Can give you financial and taxation advice all year long,
➡ 4. Assist you in finding the right deductions, adjustments, and tax credits applicable for your situation.
➡ 5. Get your state tax refund 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 over paid your tax returns to the federal or state tax agency.
In case of employees, an over amount of money is withheld but from their paychecks every week.
This is because withholding only considers the tax but does not always take into account every credit and deduction that the employee is going to take.
If you are frequently experiencing the tax refund scenario, it means that 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 largely determined through the W-4 form.
If you claim more allowances on the W-4 form then the withholding will be decreased.
Now the question is: How would you know what amount of allowances to claim so that the resulting withholding matches your tax bill?
This can be a complex calculation but seeking a 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, 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 90 days, now it is July 15.
At times, the taxpayer is eligible for refundable tax credits, which reduces the total amount of tax that the taxpayer owes to the government.
What are Tax Credits and how do they aid in tax paying?
Tax credit is an amount of money that is allotted by the government to promote a specific behavior that is in favor of everyone (govt. and individuals), such as using electronic cars instead of gasoline based.
Certain tax credits have certain values that usually depend on the type of credits.
Tax credits are granted to individuals or businesses operating in a specific location that government has made applicable for 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 do not provide any money in cash if there is no tax liability left.
Tax credits are usually of three types:
➡ 1. Nonrefundable
➡ 2. Refundable
➡ 3. 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 are laid by the government.
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 location of the business or home.
How will I get my IRS Tax Refund?
You will be required to file your tax return in order 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 bank account of the taxpayer.
Normally, deposits are made earlier in 10 to 15 days after the taxpayer has filed the return, while checks take longer than that, but they also get issued within a few weeks.
Some key factors that decide when you will receive your tax refund
➡ 1. How early you filed for the refund.
➡ 2. If you are claiming certain credits (especially EITC and CTC) as well.
➡ 3. Whether the tax refund is filed through electronic file or sent by mail.
➡ 4. Whether there are any existing 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 refund issued until mid-February as a means to protect against identity theft and tax fraud.
It is usually made safe that all the legalities are followed and the taxes have been filed properly 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, for filing done via paper or mail, this can take much longer.
The IRS and tax professionals, both strongly encourage filing done via electronic such as email or IRS web portal.
The fastest way to get your tax refund is filing electronically and selecting direct deposit as payment option.
I haven’t received my IRS Tax Refund, 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
“Where’s My Refund?” app to check the status. It is available on IRS.gov website.
Prerequisites for using the online “Where’s my Refund” application by the IRS website:
➡ 1. Social security number or ITIN
➡ 2. Current status of your filing, (Single, Married, Head of Household, or Married Filing Separate)
➡ 3. 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 maximum amount.
If you have submitted your tax refund filing via online, then wait for at least 72 hours before checking the status of your tax refund because the IRS website takes a good amount of time to be updated.
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 3 weeks before you can 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 make certain that you get your entire refund and on time.
Note: It is important to realize that you have a limited time to claim a tax refund.
Usually, for most taxpayers, the refund must be claimed no later than three years from the time you originally 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?
In order 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.
Tax refund processing is different among states, refunds, however 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 closed offices due to the coronavirus pandemic.
In order to avoid delays in your tax refund a few important things to consider:
The IRS has provided a list of common taxpayer mistakes, and that list includes typos and spelling mistakes.
If you have made any typographical errors in your filing process, it is likely that your tax refund might be delayed to a significant amount of time.
The errors include mistyping your SSN or your name.
The second type of error that you need to avoid is a mathematical error or calculation mistakes.
If your tax return has inaccuracies and poorly calculated returns or deductions, then that would mean your refund will be delayed.
This can be avoided if you consult your taxation with a professional tax expert.
The filing status that you mention while submitting for tax refund is important, you must enter the correct filing status and do not enter more than one status.
Status such as Married, Widowed, Head of household etc, can cause troublesome delays in your tax refund, if entered incorrectly.
Be sure to file your tax refund neither too early nor too late, because the IRS Software are optimized for tax forms after a particular date, so sending in too early can actually cause a delay.
While on the other hand, sending too late can add you to a swarm of taxpayers that IRS will likely be delayed in processing with.
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:
➡ 1. Using the W-4 form, adjust the amount of tax that the federal government withholds from your paycheck.
Taxpayers are more often encourage 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 same amounts of money throughout the year), also if government is consistently required to give a larger refund.
➡ 2. 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.
➡ 3. Verify and double check some tax rates and adjusted gross income thresholds (this happens if taxpayers are nearing the bottom of certain tax brackets and some modifications have been made to the thresholds and / or tax rates)
➡ 4. Another useful 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)
➡ 5. Increasing the maximum amount allowed saving tax-free for retirement.
Some people tend to increase their tax refunds, thinking of it as a savings account, so they can g22et money back each year.
One warning though, if you are getting large amounts of tax refund every year, then the IRS can get angry at you for not having correct withholding amounts and you can actually get penalized for this.
What to do with your Tax Refund money?
While it seems like free money, be more prudent once you receive your refund money.
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 key factors in making anyone rich.
Paying off credit card balances and managing debts should be your priority.
Not to mention, if your emergency fund is getting short on fuel, it is better to boost it up rather than spending money for entertainment.
If you do already have an emergency fund then it is probably better to use some of that money to help reach your next immediate financial goals.
Consider your financial goals for the current year and coming year and use your tax refund to help you reach them.