The literal meaning of a refund date will be provided when available is that your tax return is still getting processed.
A tax return still getting processed indicates that IRS has probably found any issue or they want to get additional information from you to continue your process of return.
In other words, it means that your tax return is on hold. On the other hand, when it is said that your refund has been processed, it means that IRS has approved your return and you are about to get your refund.
Further, what you need to check filing status is your social security number, the exact amount, and your filing status.
The most important and common question by tax filers related to tax is when they will receive their refund?
As the Tax Day approaches, tax filers also ask questions such as how long would my refund will take to be processed, and what is the meaning of different tax statuses?
Let’s have a detailed understanding of these questions.
Tax Return Still Being Processed:
To get your returns processed just within 21 days, you should file them electronically and directly-deposit information to the IRS. It’s because electronic returns usually consume less time.
However, if it takes more than 21 days to process the return, then you should check your refund status. On the other hand, paper returns take a longer time for a refund. It usually takes six to eight weeks for a refund.
If the situation is that you have requested a direct deposit refund after filing your tax return electronically.
In this case, the IRS says that taxpayers who have filed online will get their federal tax refunds deposited within 21 days as soon as the IRS gets the receipts of returns.
A refund date will be provided when available:
This status is shown to reflect different situations. These situations include,
- To process your tax return the IRS needs a certain time. This thing indicates that IRS may have found a mistake in your return or your information is getting double-checked.
- Usually, you get this message when your tax return faces complications. If you get this message at the start of February then there is nothing to be worried about. There are possibilities that the process of tax returns can get late by the government.
Further, you should check your refund status frequently as IRS updates the status of processing a tax return. Everybody desires to get their refund as early as possible. However, there are a few factors that can slow down your refund.
In this regard, we can take the Example that, it’s been three years that the process of paper returns is continuously experiencing delays by the IRS.
This year paper returns got delayed due to the government’s efforts and strict policies to end fraud and identify corruption and theft. This thing resulted in the delay of refunds to the taxpayers who filed on paper.
However, IRS is trying its best to give refunds to the affected taxpayers as soon as possible. Other than common anti-fraud measures such as the comparison of IRS and the document of third-party sources.
In addition to routine anti-fraud measures like comparing tax return data against third-party source documents. Additional reviews before and after returns have also been added by IRS. They act as extra layers of security.
Other than playing a major role in protecting taxpayers and ending fraud, these steps also result in the review of major levels across all tax returns.
Those taxpayers who claim that their Earned Income Tax credit or the Additional Child Tax Credit, was not seen in their refund before 15th February.
It is all because of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). This Act was passed to save taxpayers from fraud and to end corruption and theft.
The IRS is obliged to hold the refunds for taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit until mid of the February. It is to give more time for the verification of income levels and other claims on the returns.
It is also said that IRS is delaying returns because several things are waiting to be dealt with. The facts say that IRS still has to process the returns for 2019, millions of e-files were received when they opened for 2020 funds.
This added to their burden because now they have to send another round of stimulus checks. Tax laws were changed in the middle of the tax session causing millions of returns to be recalculated.
Some mistakes by the folks are also the cause of delay because they entered incorrect amounts for stimulus checks.
You may also receive a delay from IRS because they might be cross-checking to see what you have claimed.
People also ask questions like are direct deposits done by IRS throughout the day or there is a specific time? The deposit is sent to the taxpayer’s bank between 12 am and 1 am.
But this thing should be kept in view that the amount doesn’t go directly into your account. It depends on your bank, usually, it takes only some hours but sometimes the banks take up to 5 days.
In 2021, IRS has usually approved refunds i.e. 9 out of 10 within 21 days. So, If your return is being processed by IRS then you must know that only IRS has all the control. As a security measure for your tax return, you should only rely on the information provided by the IRS.
As it has been already said that checking your status is very important so you should check whether your status has changed from being processed to accepted and whether the date for a refund is given or not.
If you are in a need to get your tax refund earlier, then you can get it processed earlier by filing electronically.
The normal time for processing the electronic tax return is 21 days. However, it can get delayed because of some more investigation required to ensure claims on the tax refund are appropriate.
The IRS can update different statuses on the tax return. The most common status includes a return being processed and a refund date will be provided when available.
Both of these statutes indicate that IRS is taking some more time to process the tax return under consideration.
Frequently asked questions
What is a tax refund and does IRS provide it back?
The refund means that you have paid taxes in excess of the tax liability. Hence, IRS is obliged to pay back the amount.
So, if you have a refund at the end of tax computation. It means that you will receive the refund by filing your return.
Is there a difference between a tax return and a tax refund?
Yes, there is a difference, the tax return is what you file to prove tax liability/tax refund. On the other hand, a tax refund refers to the fact that you will receive back the tax already paid as it’s more than your tax liability.
Do we have to pay tax on tax refunds?
No, a tax refund is not taxable. It’s because of the fact that technically, it’s not an income but just a refund. However, if you receive interest on the tax refunds receivable, tax is applicable.
Is income tax refund an asset from an accounting perspective?
Yes, an income tax refund is an asset. It’s because the economic benefit is expected to inflow when it’s realized in the future. So. It’s recorded as an asset in the financial statement of the company.
What are the consequences, if we do not file taxes in the USA?
In the USA, if you don’t file taxes, you may have to face severe consequences in terms of interest, penalties, enforcement of tax liens, and many other ways around.
Generally, the penalty is 5% of the tax liability and up to 25% of the total tax liability. Further, consequences might vary from case to case and situation to situation.