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Tax season’s over, now what?

Updated: Nov 20, 2023

Refund watching, extension considerations and long-term tips for a better 2024!

As another major tax deadline has passed, and the April showers promise to bring May flowers, we are all breathing a collective sigh of relief. But don’t rest on those laurels too long. There are still things you can do over the shorter term if you haven’t received your refund yet, or if you saw the writing on the wall and rushed to file an extension. Over the longer term, what you do now can help to sow the seeds for a fruitful and hassle-free tax season next year.

The refund wait

Historically, the IRS issues refunds within three weeks. Paper returns, however, can extend that process by an additional three weeks. It’s generally advised to tack on around another 10 days to account for postal deliveries when requesting checks rather than direct deposit.

If you are concerned about the status of your check or deposited funds, the Service has established a feature on its official site, which allows for you to track the status of your refund. At “Where’s My Refund?” you may securely input your Social Security number (or taxpayer ID), filing status and refund amount. From there, the system provides the “latest” on the processing of your return.

While you can check the status of your return 24-7-365, via desktop or mobile, it is generally advised to wait four weeks before using this feature when filing paper returns. Jumping the gun and filing a second return could actually cause further delays. So, only re-file in situations where the refund is truly late (see timeframes above) and when “Where’s My Refund?” indicates that the return was never received. The IRS encourages those who filed paper returns to wait at least six months before refiling, due to differences in processing times between paper returns and e-filing.

There are numerous, non-nefarious reasons that your refund may truly be delayed. So, don’t panic! This is not a surefire red flag that something is amiss or that you will be audited. For instance, while the IRS stepped up its resources in 2022 to get ahead of the tax season, there may still be a backlog as employees continue to work through “inventory.” Additionally, a delay may be chalked up to inaccurate information or errors, as well as incomplete information.

By partnering with our seasoned team at O’Donnell, Ficenec, Wills & Ferdig, we can help to ensure the information provided is accurate and complete the first go-around. This helps to minimize potential delays in your getting the funds that are due to you. Here again, it pays to check with the aforementioned resource to see if there are simple errors that could be quickly changed to expedite the process.

It is possible, too, that your refund amount may be larger or smaller than expected. How can this be? Certain credits, for instance, can affect the final total, even delinquencies on taxes and unpaid child support may be factored in. If this occurs, the policy is for the IRS to mail taxpayers letters that account for any adjustments to the original calculated refund amount. There are ways to dispute the amounts that have been taken, and the information that is available on the adjustment notice. So, there is recourse if you feel any adjustments that are not in your favor are inaccurate.

Whatever you do, do not attempt to “speed up” the refund process by visiting the closest agency office or by haranguing via the phone! In fact, the IRS notes that the most up-to-date information on your return is available by visiting the “Where’s My Refund?” link. There is also an automated refund line at (800) 829-1954. Only inquire about refund status via phone ((800) 829-1040) if advised to do so at “Where’s My Refund” or the dedicated refund line.

A note on tax extensions

If you could not make this year’s April 18 deadline and had to request an extension, you have until October 16 to file your 2023 return. The IRS has isolated tax extensions as one of their biggest myths to dispel. While those who properly requested an extension have an additional ~ six months to file, the extra time is to file federal income tax returns – it is not an extension for payment. You must still pay any taxes that are due as soon as possible to avoid the accrual of costly interest and penalties. It’s also generally encouraged to not wait until the last possible minute in October to file. This is a best practice when dealing with any tax deadlines. Again, we are available to help answer any questions, speed up the process, and make things far less taxing as October will be here before you know it!

Set yourself up for success in 2024!

We would never rain on anyone’s parade; however, a little bit of planning now can go a long way to make a big dent in your tax savings for tax year 2023. As we like to say, tax preparation is not limited to a season. Some efforts, throughout the year, save you money and the mad rush that occurs during April. As always, we encourage you to get into a habit of consistently collecting and securely storing all of your essential documents, including those tricky receipts.

With the 2022 tax year still so fresh in everyone’s minds, it is an ideal time to consider adjustments, such as to your W-4 withholding. The more tax that your employer takes or withholds from your paycheck each pay period can either boost or present a barrier to your getting a hefty refund. In fact, you may find that taxes are owed come April.

We may also advise on steps to take before the end of the year, such as making charitable contributions, to reduce tax liabilities. Or, consider new credits that are going into effect for the ’23 tax year. For instance, as part of the Inflation Reduction Act, there are an array of new incentives or changes to credits related to energy-efficient purchases made starting this calendar year and throughout 2023. These are the types of efforts that you cannot wait on; they can make a big difference and require a little bit of consideration and advance planning.

As “tax time” winds down, OFWF is available year-round to address any concerns, potential life changes that could affect your tax liabilities, and to answer any queries you may have on an ongoing basis. Reach out to our talented and experienced team today to plant the seeds that ultimately reap big savings and help to tidy up your financial house over the long haul!

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