This is the time of year when millions of Americans eagerly await their tax refunds.
The IRS began accepting federal income tax returns for tax year 2022 on Jan. 23, 2023. It has sent nearly 8 million refunds as of Feb. 3, 2023, with an average return amount of $1,963.
Don’t be surprised if you get back less than you did last year, when about two-thirds of taxpayers were entitled to refunds with an average amount of nearly $3,200, according to the National Taxpayer Advocate’s report to Congress.
For many, tax refunds are likely to be smaller than last year because there were no stimulus payments in 2022 or expanded tax credits.
The child tax credit, dependent care credit and parts of the earned income tax credit applied only in 2021, according to Barbara Weltman, author of J.K. Lasser’s “1001 Deductions and Tax Breaks 2023: Your Complete Guide to Everything Deductible.”
Here’s everything you need to know about the fastest way to get your refund and how to check on its status:
When Should I Expect My Tax Refund?
When you receive your refund depends on how you filed your tax return. The IRS issues more than nine out of 10 refunds in fewer than 21 days, and you’ll get the money fastest if you file electronically and have the refund deposited directly into your bank account.
Filing electronically sooner rather than later is also a good way to protect against tax refund identity thieves.
“The fastest and safest way is for taxpayers to file electronically and have their refund direct deposited into their bank account,” Mark Steber, chief tax information officer at Jackson Hewitt Tax Services, says.
“Filing electronically not only helps protect against identity theft and tax refund theft, it also means taxpayers will get their refunds sooner,” he adds.
You can include your bank’s routing and account numbers on your Form 1040 or you can submit Form 8888 with your tax return. If you do the latter, you can identify up to three financial accounts among which the IRS should split your direct deposit. You can also use that form if you want to purchase savings bondswith some or all of your refund money.
[See: Smart Ways to Spend Your Tax Refund.]
If you e-file but opt for a paper check, it usually takes about a month to receive your refund, Weltman says. It could take two months or more to receive your refund if you file a paper return and request a paper check, she says.
National Taxpayer Advocate Erin Collins says, “Paper is the IRS’ kryptonite.”
How Do I Check My Refund Status?
It’s easy to check the status of your refund by using the IRS Where’s My Refund tool. Just input your Social Security number, filing status and exact dollar amount of your refund.
The tool shows you if the IRS has received your return, approved the refund or sent it. The IRS updates the information daily, and you can check the status of your refund 24 hours after e-filing or four weeks after mailing it in.
Why Is My Refund Delayed?
Your refund may be delayed if you claimed the earned income tax credit or additional child tax credit. The IRS takes extra time to scrutinize returns that claim these credits because of fraud problems in the past.
[Read: What Is the Child Tax Credit?]
Lisa Greene-Lewis, certified public accountant and tax expert with TurboTax, says your refund may also be delayed because of incomplete information or mistakes on your return (like transposed numbers or math errors), or if the income you reported didn’t match what the 1099s and W-2s issuers sent the IRS.
“Another thing that can derail a refund is to opt for direct deposit into an account that doesn’t match the taxpayer’s — such as a bank account for one spouse when the return is joint,” Weltman says. “The IRS may send a paper check in this instance, which takes more time.”
How Can I Get My Refund Faster?
You’ll get your refund faster if you file electronically and have the IRS give you your money via direct deposit. Even though the filing deadline is April 18, 2023, for tax year 2022 returns, the sooner you file your return, the faster you’ll get your refund — and the less likely a tax identity thief will claim the money before you do.
You can get the money even faster if you adjust your tax withholding on Form W-4 and have less money taken from your paychecks for taxes.
Use the IRS Tax Withholding Estimator to calculate whether you should have more or less money withheld from your paychecks for taxes. You can then submit a new W-4 to your employer to adjust your withholding and likely get more money in your paychecks right away.
Michelle Morris, certified financial planner and enrolled agent with BRIO Financial Planning in Quincy, Massachusetts, recommends saving the extra money before you get used to having it.
“I recommend putting the excess into a savings account, with the auto transfer occurring the day the paycheck lands so you never ‘see’ it in the bill paying account,” she says.
Review your withholding again if you have any life or income changes so you don’t get surprised at tax time next year.
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The Fastest Way to Get Your Tax Refund originally appeared on usnews.com
Update 02/21/23: This story was published at an earlier date and has been updated with new information.