If you’re like most Americans, you’re going to be getting a little bit of something back during tax season. The way our withholding system is set up, you’ll almost always overpay something in taxes and have it returned to you at the end of the tax year. When combined with tax credits, the end result is that most of us eagerly anticipate that check sometime between January and May.
If you’re hoping to use that tax refund sooner rather than later, there are some things you can do to speed up the process and get the IRS to cut you your check quickly:
1. Make the filing process quick and easy. You need to have a comprehensive tax strategy for your business, or even for your personal taxes. You need to have some idea of what your taxes are going to look like throughout the year. More than that, you need to organize and document your receipts, records, and expenses in such a way that, once tax time comes, you’re ready to file immediately. In many cases, you’ll just be waiting for employers to send a W2 or clients to send a 1099.
2. Understand current processing times. The IRS has, over the past few years, highly refined their filing process. From the IRS.gov website, you can now view current processing times. There’s a chart (and the format changes a bit from year to year) that shows on what date the IRS will send your refund if you file by a certain date. Typically, if you file by a certain Friday, you’ll receive your refund by the Friday that’s exactly two weeks later. In 2012, however, 2011 tax refunds were processed on Wednesdays, so you’ll want to check this each year. The bottom line, of course, is that the sooner you file, the sooner you’ll get your refund.
Some rights reserved by stevendepolo
3. Make sure all of your information is accurate. Inaccuracies in your address or personal information are one of the most common reasons why a tax refund might be delayed. If you’ve moved since last year, you’ll need to update your address with the IRS. You can do that at the IRS website, or you can fill out form 8822. Either way, try to do this well in advance of the time you file your taxes so that it has time to work its way into the system.
4. E-file instead of paper filing. E-filed returns are processed much more quickly than paper returns. In fact, we’re talking about a difference of several weeks. E-filing will make sure you get your return much faster than if you file via paper. For most people and businesses, e-filing makes sense; you’re relying on tax software or a tax preparer to put your taxes together, and either should have the ability to let you E-file.
5. Choose direct deposit. If you e-file and choose direct deposit, you’re going to get your tax refund much sooner than if you e-file and request a paper check. The paper check can be delayed or – in some cases lost – in the mail system; a direct deposit goes through instantly and electronically. Once the IRS schedules the direct deposit, you’ll typically have your refund the next business day.
6. Consider an anticipation loan. If you need your tax refund sooner than a couple of weeks, you can look into a refund anticipation loan. This is a loan given to you typically by a tax preparer, and requires you to make the preparer a payee on the refund. They give you some or all of your refund amount in exchange for a fee. These fees can add up rather fast, so make sure you know exactly how much that anticipation loan is going to cost. In most cases, it’s worth waiting the couple of extra weeks.
7. Check on your refund status. While it won’t technically help your refund get to you any quicker, you can check on the status of your refund. The IRS offers a “Where’s My Refund?” tool that lets you get a status update on your refund. The site will typically show several days ahead of time when the IRS anticipates sending through a direct deposit or cutting a check.
Ultimately, it’s up to the IRS when you’re going to get your tax refund. While the normal processing time is usually just a couple of weeks, it could take two or three months. Doing some of these things will help expedite the process, but you’re still at their mercy.
Author Bio
Dominique Molina is President of the CertifiedTaxCoach.org, a professional organization that helps tax professionals deliver thousands in tax savings to their clients. Dominique has compiled many resources for members including a tax-specific engagement letter, the most comprehensive tax course in the industry, and powerful accounting marketing guides.