Federal Refunds: Dispelling Common Myths
March 3, 2024
After taxpayers finish filing their federal tax returns, the expectation of receiving a refund arises. Yet, various misconceptions frequently lead taxpayers astray. Here are several common myths that can be misleading.
Myth #1
Contacting the IRS, tax software provider, or tax professional ensures a more precise refund date
Reality: Contrary to popular belief, the most reliable way to check your refund status is online through the Where's My Refund? tool or the IRS2Go app. The automated refund hotline at 800-829-1954 provides the same information as these online resources. Calling the IRS is unnecessary unless explicitly instructed by Where's My Refund?
Myth #2
Ordering a tax transcript is a clandestine method to ascertain a refund date
Reality: Unfortunately, ordering a tax transcript won't reveal when you'll receive your refund. Where's My Refund? is the go-to source for updates on your tax return's status, including receipt confirmation and refund approval or dispatch.
Myth #3
The Where's My Refund tool must be inaccurate if there's no deposit date provided.
Reality: Updates to the Where's My Refund tool can occur once a day, usually overnight. While the IRS typically issues refunds within 21 days, some may take longer, especially if additional information is required. Taxpayers should also factor in the time it takes for banks to process the refund, whether through direct deposit or by mail.
Myth #4
The Where's My Refund tool is flawed if the refund amount is less than expected.
Reality: Various factors can lead to a smaller-than-expected refund. If adjustments are made, the IRS will send a letter explaining the changes. Taxpayers might also receive correspondence from the Department of Treasury's Bureau of the Fiscal Service if the refund is reduced to offset specific financial obligations. Before reaching out, consult the Where's My Refund tool or await the explanatory letter.
Myth #5
Receiving a refund this year means no need to adjust withholding for 2024.
Reality: To prevent surprises in the upcoming tax year, taxpayers should proactively make adjustments now. Use the Tax Withholding Estimator tool to evaluate if your employer is withholding the correct amount. Life events such as marriage, divorce, childbirth, adoption, or changes in dependency status should prompt a withholding check. Use the results from the Tax Withholding Estimator to update Form W-4 promptly, as withholding occurs throughout the year.
Stay informed, dispel the myths, and navigate the federal refund process with confidence.
Sources: Image by MNStudio
