Debunking Common Myths About Federal Tax Refunds

Once individuals complete and file their tax return, many eagerly await any refund owed to them. Distinguishing reality from fiction can help manage expectations while waiting for their money.

Myth: Calling the IRS, a tax software provider, or a tax professional will provide a more accurate refund date.

Fact: The best way to check the status of a refund is through the "Where's My Refund?" tool or the IRS2Go mobile app. Taxpayers can also call the automated refund hotline at 800-829-1954 to check their refund status. This hotline has the same information about refunds for the current tax year as "Where's My Refund?" There is no need to call the IRS unless prompted to do so by "Where's My Refund?"

Myth: The "Where's My Refund?" tool must be wrong if it hasn't updated yet.

Fact: "Where's My Refund?" has the most up-to-date information about the status of a refund. It updates once a day, typically overnight. Although the IRS issues most refunds within 21 days, it's possible for a refund to 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 banks to post the refund to the taxpayer's account. Those expecting a refund by mail take longer.

Myth: The "Where's My Refund?" tool must be wrong because the refund amount is lower than expected.

Fact: There are several factors that could cause a tax refund to be lower than expected. The IRS will mail the taxpayer an explanation letter if they adjust a refund. Some taxpayers may also receive a letter from the Treasury Department's Fiscal Service Office if their refund was reduced to offset certain financial obligations. Before calling, taxpayers should wait for the letter to understand why the change occurred.

Myth: Getting a refund this year means there's no need to adjust withholding for the 2024 tax year.

Fact: To avoid surprises next year, taxpayers should make changes now to their tax withholding. The Tax Withholding Estimator tool can help taxpayers determine if their employer is withholding the correct amount. Taxpayers can use the results of the Tax Withholding Estimator to complete a new Form W-4, Employee's Withholding Certificate, and submit it to their employer as soon as possible. Withholding occurs throughout the year, so it's best to take this step as soon as possible.

Consult with our office Airen Consulting for more information.