Let’s face it, every taxpayer loves to get their IRS tax refund this time of year, and in most cases, those refunds are in your pocket pretty quickly. Long gone (relatively) are the days of filing a paper return and then waiting…
…And waiting some more…
For the most part, today, taxpayers are receiving their refunds in less than three weeks.
But what happens when you’ve filed, especially when you’re waiting for your refund to magically show up in your bank account?
Well, the IRS actually has a web page for that. www.irs.gov/refunds
It’s easy to use, fairly reliable, and can give you updates on when the IRS has gotten your return, when they’ve begun processing it, and when they’ll be sending your refund to your bank account.
But what if you owe back taxes? Chances are (with the exception of certain COVID stimulus payments), the IRS will take your refund.
However, there is a little trick that works … well … sometimes.
There is an option to have your refund applied to your next year’s taxes (don’t believe me? Check it out on line 36 of the 1040).
What this does is takes your refund and moves it forward to your account for the next year (in this case, your 2022 taxes). That means that you can change your withholdings or estimated taxes for this year to not have as much coming out.
Not as much taxes coming out = getting your refund, albeit throughout the year.
Now, before you go changing your 1040, keep in mind that this has only worked for my clients about half of the time. Why is that? I have no idea. It’s the mystery that is the IRS half-century old computer programs.
But it is certainly worth trying. How do you know it worked? Well, for starters, you will not get the CP49 notice from the IRS. That is the notice that lets you know they applied your refund to an unpaid balance.
The best way to check, however, is to pull your IRS transcripts from your IRS.gov account. You will want to check next year’s transcript, as that is the year the tax refund would have been forwarded to if this little tax trick worked.
If it is there, then great! Lower your withholdings and reduce your estimated tax payments.
If it didn’t work and the IRS applied your tax refund against unpaid balances, oh well . . . you tried.
If you would like to get those back tax balances taken care of, give me a call for a free case analysis today and we can see what your options are.