Tax Tip

Tax Tip 2021-56

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Taxpayers shouldn’t believe these myths about federal tax refunds

Now that many taxpayers have filed their federal tax returns, they're eager for details about their refund. When it comes to refunds, there are several common myths that can mislead taxpayers.

Getting a refund this year means there's no need to adjust withholding for 2021

To help avoid a surprise next year, taxpayers should make changes now to prepare for next year. One way to do this is to adjust their tax withholding with their employer. This is easy to do using the Tax Withholding Estimator. This tool can help taxpayers determine if their employer is withholding the right amount. This is especially important for anyone who got an unexpected result from filing their tax return this year. Also, taxpayers who experience a life event like marriage, divorce, birth of a child, an adoption or are no longer able to claim a person as a dependent are encouraged to check their withholding.

Calling the IRS or a tax professional will provide a better refund date

Many people think talking to the IRS or their tax professional is the best way to find out when they will get their refund. The best way to check the status of a refund is online through the Where's My Refund? tool or the IRS2Go app.

Taxpayers can call the automated refund hotline at 800-829-1954. This hotline has the same information as Where's My Refund? and IRS telephone assistors. There is no need to call the IRS unless Where's My Refund? says to do so.

Ordering a tax transcript is a secret way to get a refund date

Doing so will not help taxpayers find out when they will get their refund. Where's My Refund? tells the taxpayer their tax return has been received and if the IRS has approved or sent the refund.

Where's My Refund? must be wrong because there's no deposit date yet

Updates to Where's My Refund? ‎on both IRS.gov and the IRS2Go mobile app are made once a day. These updates usually occur overnight. Even though the IRS issues most refunds in less than 21 days, it's possible a refund may take longer. If the IRS needs more information to process a tax return, the agency will contact the taxpayer by mail. Taxpayers should also consider the time it takes for the banks to post the refund to the taxpayer's account. People waiting for a refund in the mail should plan for the time it takes a check to arrive.

Where's My Refund? must be wrong because a refund amount is less than expected

There are several factors that could cause a tax refund to be larger or smaller than expected. Situations that could decrease a refund include:

• The taxpayer made math errors or mistakes
• The taxpayer owes federal taxes for a prior year
• The taxpayer owes state taxes, child support, student loans or other delinquent federal non-tax obligations
• The IRS holds a portion of the refund while it reviews an item claimed on the return

The IRS will mail the taxpayer a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.