Getting a Tax Refund

If you pay too much, the government will send you a refund.

One of the few pleasures many of us experience in regard to paying income taxes is getting a refund each year from the IRS. In fact, however, getting a big refund check means that you either had too much withheld from your paycheck, or you overpaid your estimated taxes during the previous year. In essence, getting a refund from the IRS means that you've given the government what amounts to an interest free loan of your money.

To reduce the size of your refund, you should ask your employer for a new Form W-4. You can take additional allowances on this form to reduce the amount of tax withheld from each paycheck. Just be sure that the amount of tax withheld from your check equals the amount of tax you actually owed during the previous year, or at least 90 percent of the amount you will owe this year.

If you are self-employed you can reduce the amount of your estimated tax payments, but again you need to exercise caution and avoid reducing them too much, or you could be subject to penalties for underpayment.

There are other good reasons for avoiding putting too much of your money into the hands of the IRS by having too much withheld from your check. Under federal law, the IRS can withhold all or part of your annual income tax refund for a variety of reasons. If you owe back child support, defaulted on a federally guaranteed student loan, Veterans' Administration loan or Small Business Administration loan, or if you owe back taxes, penalties or interest on a previous year's taxes, your entire refund may be withheld to satisfy your outstanding debt.

Many a divorced spouse has been surprised to have an anticipated income tax refund withheld to pay back taxes owed from a joint return filed while she was still married. While it may be possible to get this money released by claiming that she filed her return as an "innocent spouse" who did not have actual knowledge of what the joint return she signed contained, getting an innocent spouse ruling is time consuming and may not even be successful. All in all, it's best to let the IRS have no more of your money than it needs to meet your current tax obligation.

Under federal law, if you file your return by the April 15th deadline and you don't receive your refund by June 1st, you are entitled to receive interest on the refund, unless it's being held back for one of the reasons stated above. The earlier you file your return in the tax season, the less time you'll have to wait to receive your refund, since IRS workers have fewer returns to handle early in the year. If you will be entitled to a refund from the IRS, you should probably file your return as soon as possible in order to receive your refund quickly. It may take as few as three or four weeks to receive a refund if you file in January, but if you wait until April, eight to ten weeks could pass before you get your refund check.

If you haven't received your tax refund from the IRS within ten weeks of filing your return, you can check on its status by calling the IRS' special Automated Refund Information (ARI) telephone number. You'll find this number listed in the instructions for preparing your tax return. When you call this number, you will need to provide your Social Security number, your filing status, and the amount of the refund you are expecting to receive. The IRS can then give you an estimated time for the delivery of your refund check.

If you don't receive your refund in the promised time limit, your next step is to contact the IRS Center where you mailed your return. Include your name, address, Social Security number and an explanation of your problem. Send your letter by certified mail, return receipt requested, and keep a copy of your correspondence for your files.

If you still don't get your refund, or if you are dissatisfied with the response you receive, contact the Problem Resolution Officer at the IRS Service Center where you mailed your return. The PRO will look into the matter and report back to you within five working days. If your refund is being withheld because of overdue child support or an unpaid government loan, the PRO will provide you with information about the steps you will need to take to contest the with holding.