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3 Tips to Avoid Refund Delays

by | Dec 5, 2017 | Tax Tips for All | 0 comments

Are you one of the lucky ones who receives a refund on your taxes? If so, follow these steps to ensure smooth processing of your 2017 tax return. Top three things you should know to avoid tax refund delays.

1. Gather all documents

Employee

In order to file a complete and accurate tax return make sure you have the necessary documents before you file. This includes:

W-2 from any employers

1099 from your bank for interest earned

1095-A for the health insurance premium tax credit

1098 for mortgage interest

Typically, these forms are available either by mail or online in January. You should check them over carefully, and if you discover an error, contact the payer right away for a correction.

Self Employed

Make sure all your business records are accurate and up-to-date. Reconcile all accounts for 2017 and ensure that all charges and income are accurately reflected. You’ll want to create an accurate Profit and Loss statement to make tax preparation easier and quicker.

If you have an S-corp, you’ll also need a balance sheet and a liabilities report. Plus, you’ll need salaries for all owners. This information should be in your books.

Create a mileage report for easy reporting on your taxes.

Gather the date, cost and other information for any large business purposes for depreciation deductions. This includes new equipment purchased. I usually say anything over $100-$150 should be depreciated and is considered an asset for your business.

Do you have a home office deduction? Make sure you know the size of the office space and the size of your home.

2. E-file using direct deposit for a faster refund

Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Plus, when you e-file you can receive direct deposit of your refund which is the fastest way to receive your refund. With direct deposit, your refund goes directly into your bank account. It will be a happy surprise when you see that bump in your bank account, right??!

There are several e-file options:

  • Commercial tax preparation software (i.e. TurboTax, etc.)
  • Tax professional such as a CPA or EA.
  • Free e-file with the IRS.

Earned Income Tax Credit and Additional Child Tax Credit

Please take note that the IRS cannot by law issue refunds for people claiming the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. This law helps make sure that taxpayers receive the refund they’re due by giving the IRS more time to detect and prevent fraud.

The IRS expects the earliest refunds related these credits to be available in your bank account starting on Feb. 27, 2018, if the taxpayer uses direct deposit and there are no other issues with the tax return. This additional period is due to several factors, including the Presidents Day holiday and banking and financial systems needing time to process deposits.

Refund Status Check

Check on your refund status here at Where’s My Refund or use the IRS mobile app, IRS2Go, for your personalized refund status.

3. Protect Against Fraud

File early. Once you have all your documents ready for filing, don’t delay. What are you waiting for?

These new rules are for fraud prevention as it has become prevalent with e-filing. If you prepare and file your own taxes electronically, you must sign and validate your electronic tax return by entering your prior-year AGI, so make sure to have that handy.

Some taxpayers using a software product for the first time may need to provide their 2016 Adjusted Gross Income, or AGI, to e-file their 2017 tax return. This is for your protection to prevent fraud.

Your AGI is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.

Should you e-file and get a rejection notice. Make sure to understand the code. If the code indicates your social security number has already been used, you will need to file an identity theft affidavit.

This is one reason I highly recommended filing as early as possible. It helps prevent fraud and gets you your refund quicker.

 

Hi! I’m Heather Ryan, EA and I live full-time in an RV with my husband and two dogs. As a full-time digital nomad, I understand many of the unique tax situations created by travel. I also fully support entrepreneurs and the struggles they face. The goal of this site is to offer my knowledge through advice and tips to real-life situations and questions.

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Disclaimer:

This website is for general information only and is not intended to substitute for obtaining legal, accounting or financial advice. It is not rendering legal, accounting or other professional advice. Presentation of the information on this website is not intended to create a client relationship. For specific tax assistance please consult a tax professional on an individual basis.

While I make every effort to furnish accurate and updated information, I do not guarantee that any information contained in this website is accurate, complete, reliable, current or error-free. I assume no liability or responsibility for any errors or omissions in its content.