The IRS has issued more than 42.5 million refunds so far this tax season
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Stimulus checks aren’t the only infusion of money hit US households.
In addition to those $ 1,400 in direct payments to most adults, more than 42.5 million tax refunds were made in the first four weeks of the tax season, which began February 12, according to the IRS on Thursday. The average amount is $ 2,967, a slight decrease from $ 2,973 a year ago.
Given that temporary tax changes have taken effect since many of these refunds were expired – including waiving federal taxes on unemployment benefits of $ 10,200 and waiving tax credits on health insurance premiums – some households are seeing an unexpected (or larger) refund.
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In addition to extending the deadline for filing taxes to May 17th from the usual April 15th, the IRS advises taxpayers who have already filed an application to wait for further guidance on how to collect any additional amount they owe.
If you’ve submitted your return and are still waiting for your refund, it may or may not be delayed depending on the specifics of your situation.
Generally, if you submit an email, the refund can take up to 21 days. However, if you filed a paper return, the IRS has warned that there could be a delay.
“We know the IRS is still handling email issues, so filing a return will take longer,” said April Walker, senior manager of taxation and ethics at the American Institute of CPAs.
Your refund could also be delayed if flagged because something on your return did not match the information provided by the IRS, Walker said. If so, you may receive a letter stating the discrepancy and possibly the additional tax owed.
You can track your refund using a tool on the IRS website.
The top three ways taxpayers say they would use a refund if they got one? Put it in a savings account (41%), pay off debts (39%) and pay the necessary household expenses (23%), according to a recent survey by MagnifyMoney.
In the meantime, a refund usually means that more tax was withheld from your paycheck than required during the year.
“When you get a tax refund, you’ve overpaid the government and let them use your money technically for free,” said Kathryn Hauer, an IRS-registered agent and certified financial planner with Wilson David Investment Advisors in Aiken, South Carolina.
In typical years, experts may recommend that you use that money later in the year rather than get a large refund, using a tax planning strategy to reduce income tax withheld from your paycheck.
However, said Hauer, all bets are off this year.
“With changes to the tax rules, Covid exemptions and three stimulus checks, tax planning can compete with its uncertainty,” said Hauer. “My advice to customers is that it is safer to play it safe and arrange things so that you can get a refund.
“If you underpay your taxes, you could owe penalties, interest and fees,” said Hauer.