Everyone loves getting a tax refund, right?Not us! We'll explain why; but first let's cover some basics about filing deadlines and refund timing.
Preparing, Filing and Acceptance of Return. There are several steps your tax professional goes through with your return. Here is a very rough, general rundown:
- Client (you) signs engagement letter (legal agreement documenting the services to be performed) and authorization to file electronically. This starts the relationship.
- Tax professional collects documents from the client after providing them with a list or what we call internally an "organizer."
- Tax professional prepares the return from the data received. This is the step where the tax professional uses their skills to look for discrepancies and opportunities. There may also be some reconciliation, ticking, and tying that are done to validate the numbers.
- Tax professional asks any questions that arise from the preparation step. Client also has a chance to ask questions once a draft copy of the return is presented to them.
- Tax professional finalizes the return and prepares the deliverables. Depending on what service you've selected, this may include a copy of the return, a cover letter, an estimate for next year, and suggested planning activities you can do to save on next year's tax bill.
- Tax professional collects payment from the client if they haven't done that earlier.
- Tax professional e-files the return.
- IRS usually accepts the return within 2 days of the time it's filed.
early has its advantages, especially if you are expecting a refund. You remember
how crowded it is at the malls before Christmas, right? Your tax preparer has exactly
11 weeks from the time the first return can be filed (this year it was February
27, 2020) to the deadline (April 15, 2020) to get either everyone's return
filed or to file an extension for more time.
even less time for corporations: this deadline is March 16 this year, with an
option to extend.
early, just like shopping early for Christmas, means less wait time all around
and more peace of mind. Please consider sending
your tax preparer your documents as soon as you receive them, especially if you
have a fairly simple situation. They
will thank you for being early!
Up on When You'll Get Your Refund
good news is you don't have to call the IRS to find out when you might be
getting your refund. Once your tax
return is filed and accepted, it takes anywhere from 1 week to 2 months to get
you refund. It's fastest if you selected
direct deposit and filed electronically, and slowest if you requested a check and
filed by mail.
couple of other things can slow a refund as well. If you claimed the Earned Income Tax Credit
or the Additional Child Tax Credit, your refund may be slower.
check on your refund status, you'll need your social security number, your
filing status (as in Single, Married Filling Joint, etc.) and the exact amount
of your refund. Use this link provided by the IRS to check your refund status:
Aren't Refunds Good News?
are good news when they are small. But we
don't feel big refunds are ever good news. When you're owed a refund, it means
you loaned the government your hard-earned money all of last year without
charging them interest. The money that's
tied up in your tax refund could have been working for you all this time,
through investments in stock, real estate, retirement accounts, business deals,
or at the simplest, a savings account.
tax planning should allow you to manage your payments to the IRS, whether they
are withheld from your paycheck or you make quarterly estimated payments. Refunds
only occur when you overpay.
Contact your HLB Gross Collins, P.C. representative for tax planning guidance.