With the tax season officially ending for the fiscal year 2024/2025 last month, many taxpayers will soon begin to receive refunds from the Internal Revenue Service (IRS). In general, many people will receive a federal income tax refund. Refunds can be a terrific source of financial boost right after tax season, providing some respite for individuals who receive a larger tax refund than others. However, it is crucial to note that a return is not guaranteed.
Why do income tax refunds come after you file your return?
Most people pay their taxes to the IRS through their employers. Each month, a percentage of your salary is withheld and applied to your taxes. When you pay your income taxes at the end of the fiscal year, the IRS compares what you paid in taxes against what you owe them. This method indicates that some people have been overpaying their income taxes. This is also why it is critical to always file your income tax, even if you pay it throughout the year.
Additionally, it is required to file your income since some people receive income from sources other than their employment, such as assets and investments, on which you must pay taxes. Tax credits are another way for taxpayers to receive refunds. These credits decrease your overall tax payment to the IRS and may be refundable. The Child Tax Credit and the Additional Child Tax Credit are two of the most popular credits among families every year.
When can I expect to receive my refund if my tax return is accepted?
The IRS suggests using the “Where’s My Refund?” service to follow the progress of your return. If you are certain that you are entitled to a refund but have yet to get one, and the tool indicates that you are owed one, you may receive it by the end of this week if the following conditions apply:
You submitted your return via mail.
You choose mailed check as the method of deposit for your reimbursement.
These two filing procedures are frequently the most time-consuming, taking roughly two months on average. If you filed at the end of the tax season before the April 15 deadline, the most amount of time you will have to wait for your return if you picked these two filing methods is mid-June. According to IRS official May 9 numbers, the average refund for filers this year was $2,939, up from the previous year.
Why would my return be withheld, and how can I get it resolved?
If you submitted your taxes at the start of the tax season and have yet to get a refund, there could be a number of reasons why it has been held. This is frequently due to you still owing federal or state debt from unpaid state or federal income taxes. Your refund or tax credit may also be withheld if you have overdue child support or have defaulted on your student loans.
If you are certain that you are receiving a refund from the IRS, you should contact them to find out why it has been withheld. When there is misunderstanding about your taxes, you should always seek communication and advice from an IRS agent, especially when submitting your taxes and seeking tax credits. If you have not yet filed, you should do so as soon as possible and call the IRS to assist you develop a plan to pay your income tax if you have not already done so.