Home Career Still missing a tax refund? Soon you will get 5% interest

Still missing a tax refund? Soon you will get 5% interest

108
0

Bill Oxford E + | Getty Images

If you are still waiting for a tax refund, there is silver: this may increase interest rates, and the rate will jump to 5% from 4% from July 1, according to the agency last quarterly adjustment.

Typically, the IRS has 45 days after the deadline for filing declarations and sending returns. The agency then applies daily accruing interest, explained Tommy Lucas, a certified financial planner and registered agent of Moisand Fitzgerald Tamayo in Orlando, Florida.

Due to the federal short-term rate, IRS interest rates are now falling lower 8.3% annual inflation. But it’s still much higher than that average savings account.

While this sounds good, there is a downside: your interest is taxable.

More from Personal Finance:
Research shows that tax breaks are not the main reason for high-value charity
Only 18% of Americans plan to increase investment in the stock market this year
FinTok has helped this financial professional reach a new generation of investors

IRS interest payments rose to $ 3.3 billion in fiscal 2021, up 33% from 2020 for individual income, according to the U.S. Government Accountability Office reported.

Check return delay

The easiest way to check the refund status is through “Where’s my return?” online tool or using IRS2Go app. The portal shows three steps: receipt of return, approval of return and, if return has been sent, with the estimated date of deposit.

The IRS recently updated the portal to include revenue for 2019 and 2020, said Phyllis Joe Cuby, a registered agent from New York and president of the New York State Registered Agents Association.

“Prior to this update, the online return request only covered the current year’s refund, which means that anyone interested in a previous year’s refund had to call the IRS,” she said.

High call volumes have been a constant problem, and many taxpayers are struggling to contact IRS agents. During the first half of 2021, there were less than 15,000 employees who handled more than 240 million calls – one agent for every 16,000 calls, according to National Defender of Taxpayers.

“I hope this is the beginning of further improvements to the IRS’s online return request tools, and I look forward to new improvements,” Kubei said.

The IRS lags behind

It was about a difficult period for the IRS as the agency struggles with the pandemic-related backlog.

The IRS started 2022 with about 8.2 million paper declarations, leaving 1.7 million as of May 6, said Ken Corbyn, chief executive of the Taxpayer Agency, a subcommittee on oversight of the House of Representatives in May.

“Our goal is to return the IRS to a state of pandemic,” he said. “We need to process this document so we can get back to the case of providing the services that taxpayers deserve.”

IRS Commissioner Charles Retig told members of the House of Representatives in March expects the backlog to be eliminated by the end of 2022.

Source link

Previous articleLearn about habitat conservation in these dragonflies
Next articleHistory of New York Regents canceled due to shooting at Buffalo