What Delays Tax Refunds?

What Delays Tax Refunds?

April 15, 2020

Tax refunds are often the largest “paycheck” received by many American workers. When they are delayed, it is a cause for anxiety, especially in uncertain times like these. Why is a tax refund sometimes delayed in Hayward, CA? There can be many reasons why a tax refund is delayed, from the most mundane administrative ones to something more threatening, like an audit. Here are five reasons for delayed tax refunds:

  • Debt payments: If you owe federal taxes and have not paid them, the IRS can seize refunds and apply them to that balance. The same is true for other debts, like past-due child support, other payments to federal agencies, state taxes and unemployment compensation overpayments. However, if you filed jointly with your spouse and only one of you is liable for these debts, you can receive your portion of the refund. Contact a tax professional if you face this situation.
  • “Math error”: This alone is often a good reason to hire a tax professional. If there is an error because the numbers do not add up, the return is rejected due to a “math error.” This can be discovered more easily with e-filing and allows you a chance to fix the error, but mailed returns often lead to discovering the error after the fact. However, this is not limited to miscalculations. Scrambled Social Security numbers or filling out the wrong schedule can also result in a math error and delay your refund.
  • Identity theft: If you have not filed for a while or use the wrong Social Security number, the IRS may suspect identity theft. In this case, your return is held until the IRS can verify your identity. To do this, they will send you a form to complete. The more quickly you jump through this hoop and show you are who you claim you are, the sooner the delay of your refund will end.
  • Audit: The IRS may question your tax credits or deductions. There may also be issues with ACA health insurance coverage, or perhaps you forgot to include a 1099 in your return. All of these issues can lead to an audit that delays your refund. As this is a time-consuming and often stressful practice, it is a good idea to hire a CPA firm that offers tax representation services so an audit is handled successfully. If you are facing an audit from an earlier year and it has not concluded, that will also delay your refund even if your 2019 tax returns are never subject to an audit.
  • Behind on tax returns: The IRS often holds refunds if you are behind on tax filing. So, if you have a refund for 2019 but 2018 remains unfiled, they will hold that refund until you file for 2018. Once you file the past-due return, the IRS will take any taxes owed out of the current year’s refund.

If you need to know why a tax refund is delayed, Menjivar & Company CPAs, Inc. in Hayward, CA can help you. Our tax representation services can assess the situation and let you know what is going on. Contact us today to arrange a consultation.

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