What Can Delay Your Tax Refund?

Don't write the check for that car until your refund is in hand.

Approximately 36 percent of the 142 million taxpayers in America receive refunds each year. In 2010 the Internal Revenue Service sent out more than $328 billion in refund checks, according to CNN Money. The average refund amount was more than $3,000. Retail outlets hold tax refund sales, car dealers boast tax refund rebates and many taxpayers plan specific purchases that target the funds from their refund checks. A refund delay can put a crimp in those plans.

Not Filing Electronically

Filing a return through the U.S. Post Office automatically slows the refund process. The ability to file electronically streamlines the process, allowing the taxpayer to begin tracking the refund within days of filing. Choosing direct deposit during the electronic filing process can get your refund in hand as soon as seven business days. A paper-filed return sent through the mail requires four to six weeks before the filer is allowed to start asking where the check is.

Addressed Wrong

Out of the dozens of Internal Revenue offices throughout the United States, you need to send your return to the correct one. Sending it to the wrong address can delay the refund for weeks, possibly months. In addition, your state income tax return must be mailed to your state's Department of Revenue, not the IRS. Sending it to the IRS creates a long delay as it must be mailed back to you and re-sent.

Incorrect Information

If your return has any mathematical errors, it will automatically be kicked out for a quick review and correction. This delays processing and, thereby, the refund. To avoid delays, taxpayers need to carefully fill out their returns and double-check the numbers before submitting. Miscalculations or accidentally transposing numbers triggers an IRS- or Department of Revenue-corrected return and the taxpayer receiving a letter of explanation before the refund check arrives. The same goes for incorrect information in your name, social security number or other areas of the return.

Government Shutdown

While rare, it is possible for a government shutdown to delay tax refunds, whether due to lack of manpower to process mailing or issues with the budget, preventing direct deposits.

References

• US Tax Center; Things That Can Delay Your Tax Refund; Chris Bibey
• ABC News; Government Shutdown Threatens to Delay Tax Refunds ...
• Tax Foundation: Record Number of Tax Filers Paid No Federal Income Taxes in 2008
• CNN Money; Average Tax Refund in 2010: $3,003; Blake Ellis; January 2011