December 19, 2016

Tips to Get Your Tax Refund Faster

tax-formsNobody wants to wait to get a tax refund. If you’re anticipating getting money back from the government, odds are you want those funds in your bank account as quickly as possible. Here are tips on how to get your tax refund faster.

You can file your taxes as soon as your or your accountant has all the relevant paperwork in hand. Many companies are not required to send your documents to you until Jan. 31, but they may arrive in your mailbox or email earlier. You do not have to wait until April 15 (or April 18 in 2017, since April 15 is a Saturday and Washington, D.C. observes Emancipation Day the following Monday, April 17).

Filing your taxes online through “electronic filing” or “efile” is usually the fastest way to get your refund. You can use one of the Internal Revenue Service’s (IRS) Free File partners or have your accountant efile for you. The IRS’ Free File partners are brand-name services available to individuals with incomes below $62,000. The IRS also offers Free File Fillable Forms online, for which there are no income limitations — but be aware that there is no guidance either, like there would be from your accountant.

Paper returns are typically processed much more slowly, with refunds taking six to eight weeks to hit your bank account, although you can still select direct deposit even if you file a paper return. Whether you e-file or are one of the few still sending in paper returns, direct deposit will get you your refund faster than a paper check in the mail.

Requesting direct deposit on your efiled returns will also speed up the process, and the IRS suggests that taxpayers use this option. Choosing direct deposit will ensure that your refund goes right from the U.S. Treasury into your checking or savings account. According to the IRS, eight out of 10 taxpayers who are receiving a refund opt to get their money through direct deposit.

Furthermore, direct deposit is a much safer option — you avoid the risk of your check being lost or stolen in the mail, or returned to the IRS as undeliverable.

Once you file your refund, you can use the IRS’ Where’s My Refund? tool to track the progress of your return. If you efile, that information will take at least 24 hours to appear in the tool. If you file a paper return, it could take as long as four weeks for that information to appear.

About 8 in 10 tax filers get a refund every year, according to IRS data. The average refund is about $2,800 — not a small amount. Here are some ways to ensure a quick turnaround on your tax refund. According to a GoBanking Rates survey, most people plan to either pay down debt or increase their savings with their refund.

Remember, though, that getting a refund isn’t necessarily a good thing. A big refund means that you essentially overpaid the government over the past year, giving them an interest-free loan. If you adjust your withholding amount so you neither owed taxes nor got a refund, you could have an extra $230 in your pocket every month. Talk to you accountant about it!

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