Filing early is the number one tip offered by tax professionals year after year, and most people have a huge incentive. The IRS issued almost 122 million refunds for the 2020 fiscal year.
So while refunds are on the rise, what are some ways that you can ensure you quickly receive your refund?
The best thing you can do is file early. This may seem like a no-brainer, but the professionals say many people still don't realize the impact early filing can have. If something goes wrong with your return, you might not have time to deal with any extra security steps involved, due to tax return fraud. The IRS will take its time in this area, so you should give yourself a cushion.
Also, do your due diligence to make yourself aware of the many options available to file your taxes for free. Low- to moderate-income taxpayers can benefit from one of a number of assistance programs that will help to streamline the process. This will not only save time, but unnecessary expense and stress as well.
The simplest of missteps can cause countless delayed refunds.
Take the time to review such things as your name, Social Security number, and bank routing number carefully. If you got married or divorced in the last year, double-check that your legal name is updated, particularly if you're e-filing.
Why is filing electronically a key part of getting your tax refund? Because it expedites the entire process.
There are numerous ways to file electronically. Those whose adjusted gross income is $62,000 or less annually may want to use the Free File software options provided by the IRS. There are many well known companies and software options available through this program, including H&R Block, TaxSlayer, and Jackson Hewitt's Free File.
In addition, for a fee, there are many commercial online tax preparation services and software.
This option may not be for everyone, particularly those who don't have a bank account. But, like filing electronically, it's one of the best ways to speed things up. One underrated reason in favor of this option is it takes away the worry of the post office possibly losing your check.
Taxpayers without a bank account may want to look into establishing an Individual Development Account. A valuable tool for low-income families, IDAs are savings accounts that in many cases are able to receive a direct deposit.
If none of these options are feasible, your best route is to file early and make absolutely sure that your check is being sent to a secure location.
[This article appeared on The Simple Dollar in March, 2020. It was updated in December, 2021.]