30 Nov IRS Warns of 2017 Tax Refund Delays
If you owe taxes in April, as opposed to getting a refund, then this won’t affect you. For those who are expecting a tax refund in April, you’re in for a rude awakening. Adjusting your tax withholding may be beneficial, due to the Internal Revenue Service stating that certain taxpayers will have to wait longer than usual for their returns.
The reason for this announcement is due to the IRS commissioner John Koskinen not wanting taxpayers to be “caught by surprise if they receive a refund” later than usual. These delays are the effect of a new tax law that will be enforced in the year 2017. The law forces the IRS to hold refunds longer than usual for early filers who claim the Earned Income Tax Credit, and Additional Child Credit.
The entire refund will be withheld until at least February 15th and not just the money you’ll receive from the tax credits.
Another reason for delay is due to the increase of identity theft. Although, this reason may bring a peace of mind to taxpayers, it can still prolong the process. Koskinen wants individuals to know that one of their biggest goals is to “protect taxpayers from identity theft.”
The question now becomes; what steps can you take to avoid a tax refund delay? Simple, take home more money now, and receive a refund smaller in size. This is done by adjusting your withholdings. We know 2016 is coming to a close, but it’s not too late.
The issue then becomes deciding how much to hold and how much to keep. Balance is key here. However, anyone who earns income besides wages and salary, such as; self-employment money, dividends, and interest, etc. should be very careful. You are required to pay taxes 4 times a year, unless your tax due is less than $1,000 after taking away withholdings and credits if you fall into this category. There have been more than 102 million refunds issued in 2016 so far, which many of those refunds were over $2,700 dollars per taxpayer.
Although tax refunds are expected to be delayed, one should still expect most refunds to be dispersed within 21 days or less since the IRS is still trying to work diligently. The main point is; don’t be surprised by delays, as that is expected for the up and coming tax season. Withhold more of your money now, and get your refund faster.