How Long Do Tax Returns Take to Process and Receive?
Discover the factors affecting tax return processing times and learn how to track your refund status efficiently.
Understanding the timeline for processing and receiving tax returns is crucial for taxpayers managing their finances effectively. Various factors influence these timelines, and being informed can help reduce stress during tax season.
Basic Processing Periods
The time it takes for the IRS to process tax returns depends on the method of submission and the return’s complexity. Electronically filed returns are typically processed within 21 days due to automated systems that streamline verification. Paper returns, on the other hand, can take six to eight weeks, as they require manual handling and are subject to postal delays.
Complex returns, such as those involving self-employment income, rental properties, or foreign income, may take longer to process. Returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) undergo additional review, delaying processing until mid-February.
E-File vs Paper Returns
The choice between e-filing and paper returns significantly affects processing speed and accuracy. E-filing is faster and more efficient, with the IRS’s systems quickly verifying data and reducing errors. Discrepancies in reported income or deductions are flagged immediately, allowing taxpayers to address issues swiftly.
Paper returns, however, involve a slower, manual process. Errors are more likely due to manual data entry, and postal delays can further extend timelines. Complex returns with multiple deductions or credits are especially prone to errors. Additionally, confirmation of receipt for paper returns is delayed until the IRS begins processing, unlike e-filing, which provides immediate submission confirmation.
E-filing platforms often include error-checking features and real-time assistance, ensuring greater accuracy before submission. This convenience makes e-filing a preferred option for most taxpayers.
Checking Refund Status
The IRS offers a tool called “Where’s My Refund?” to help taxpayers track their refund status. Available on the IRS website and the IRS2Go mobile app, the tool provides updates in three stages: received, approved, and sent. Updates are made daily, typically overnight.
To use the tool, taxpayers need their Social Security number or Individual Taxpayer Identification Number, filing status, and the exact refund amount. Accurate information is essential to avoid delays. The tool becomes functional 24 hours after e-filing and four weeks after mailing a paper return.
Delays or discrepancies in status updates may occur if the IRS requires additional information or identifies issues with the return, such as mismatched data. Promptly responding to IRS correspondence can help resolve such problems. Taxpayers should remain cautious of scams; the IRS does not contact individuals via email or phone to request personal information about refunds.
Reasons for Delays
Delays in tax refunds can be frustrating. Common causes include errors in taxpayer information, such as incorrect Social Security numbers or mismatches in reported income. These issues prompt additional IRS verification to ensure compliance with tax laws. For instance, if W-2 information doesn’t align with IRS records, the refund may be held until the discrepancy is resolved.
Some returns are flagged for review by IRS algorithms that detect deviations from statistical norms, such as unusually high deductions. These flagged returns undergo thorough examination, extending processing times. Tax returns claiming the Foreign Earned Income Exclusion or involving complex investment income may also face additional scrutiny.
When to Seek Professional Guidance
Navigating tax return complexities can be challenging, and professional guidance is often beneficial. Certified Public Accountants (CPAs) and Enrolled Agents (EAs) provide expertise for individuals and businesses with intricate financial situations. They stay updated on current tax laws and regulations, ensuring accurate and optimized returns.
Taxpayers with international income, significant investments, or major life changes like divorce or inheritance can benefit from professional advice to avoid costly errors. Those receiving IRS notices, such as audit letters, may find professional representation helpful for effective communication with the agency and to ensure compliance.