The IRS has millions of tax refunds to process, which is why it could take longer than expected to get your refund. The IRS usually takes 21 days after the e-file to refund the tax return.
If it is taking longer than the mentioned time period, there’s a high possibility that there is something missing to process your refund.
In the coming section, we have covered the top 10 reasons why your refund may get delayed.
1 – Missing Documents
You didn’t provide the IRS with the complete documents. It is possible that you left out a form. If this is the case then the IRS will send you a letter to file complete documents. Once you complete your required documents, your refund will be processed accordingly.
Warning: Be aware of scams, the IRS never calls, emails, or texts to inform about such cases. The IRS only follows professional means of communication.
2 – Wrong Information
It is possible that you had an error while filling in your required data. The IRS follows strict procedures to verify the given information and does not process any refund without fully verifying the data.
Most of the time people write the wrong social security number or your dependent’s information doesn’t match with the IRS records. It is also possible that forget to sign their tax return refund or add an amount to the wrong.
3 – Unpaid Taxes
If you haven’t completely cleared your dues of the previous year’s taxes then your refund could be delayed. The IRS might cut that amount from your refund, and the process gets delayed in completing your refund.
The IRS is also allowed to reduce your refund if you have other non-tax debts like unemployment compensation repayments, child support, or state taxes. The amount unpaid is deducted from your tax refund.
4 – Computation Error
Computational error is one of the vastly observed anomalies that cause a delay in refund. There is a high possibility that you miscalculated your tax amount and filed your tax return with an error.
If it’s a small computation error then the IRS fixes it itself and notifies you through a letter. However, if it’s a large error then the IRS informs you and you have to resubmit your tax return.
5 – Wrong Account Information
In some cases, people incur wrong depository information which is why your tax refund is delayed. Make sure that you enter the accurate account number or routing number.
6 – Late or Early filing
There is a misconception that if you file early you will get a refund quickly. Early filing can sometimes not be in your favor because the IRS could be updating its tax software for the upcoming filing season.
Moreover, if you file late then the IRS may be concerned about identity theft. In such cases, theft is taken into account and there is more due diligence for the verification.
Moreover, a huge number of people will be filing their taxes at the last minute and it could take a lot of time to process which results in a delay in your tax refund.
7 – Paper File
As the world is moving at a fast pace with technology, the IRS also keeps on updating its system accordingly.
The IRS processes e-file through its website faster, and the paper verification process takes time. People who file online get their refunds early as compared to people who mail or submit documents.
8 – Amended Returns
If you change jobs or living places, you are required to amend your tax returns accordingly. In such cases, you have to inform the IRS beforehand.
The update of your records in the system takes time which can cause a delay in your tax refunds.
Note: The IRS accepts amended returns online starting from the year 2019. If you have to amend your returns for years before 2019, you will have to mail the documents to the IRS. E-filing is not acceptable for years before 2019. This process usually takes 8-12 weeks after filing for the return.
9 – Tax Credit Claimed
If you have applied for a tax credit then the IRS goes through an extensive verification process.
Furthermore, if the IRS thinks you’re not eligible for tax credits like EITC or ACTC, it will maintain additional checks and balances to double-check your eligibility.
During this process, if you have claimed refunds as well then it will take time to process.
10 – Due to Audit
If the IRS finds any anomaly in your tax returns, you will receive a letter of CP88 from the IRS. This letter indicates that your refund will be delayed until the IRS completes the audit.
It normally takes 6 months to complete an audit by the IRS.
Conclusion
It is advisable to file your tax returns using e-file. It’s the fastest way to file your tax returns and get your refund on time easily.
Moreover, if you are still struggling to get a refund, we’d suggest taking a consultation with an experienced CPA.
Since everyone’s case is unique, you may not understand all the complications in the procedures of the IRS. An experienced CPA can save you time and get you refunded quickly. Moreover, he can also defend your tax returns if you are faced with an audit by the IRS.
