Tuesday, May 30, 2017

Changed Refund Amounts

People call the IRS, when the refund they got wasn't as much as they were expecting. Why does this happen?
  • You owe the IRS money. If you owe the IRS anything, they will take it out of your refund and pass the remainder onto you.
  • You owe the government money. If you owe the government money--usually state debt, student loans or back child support--the government will take the money out of your refund and pass the remainder onto you. These debts are handled by the Bureau of Fiscal Services, not the IRS.
  • Math error. If the math is wrong on your tax return, the IRS will fix it for you.
  • Bad social security number. If you put down the wrong social security number for someone on your return, the IRS won't accept it. The person will be taken off the return, which can have a cascading effect on your taxes.
  • Tax preparer fees. Some tax preparers will take their preparation fee, out of the refund. Some taxpayers will forget (or not know) that they agreed to let this happen.
  • Missing payment. If you tried to send the IRS a payment, but they didn't get it, they're not going to apply that payment to the taxes you owe. Same if you sent a payment, but it was applied to the wrong year or person.
  • Questionable item on your return. If one part of your return is questionable, but the rest of it is fine, the IRS might decide to send good part of the refund out, but hold onto the rest, pending further inquiry. Normally, this happens if there is good reason to believe someone is claiming a child that they shouldn't.
  • Computer error or processing error.
I could write a full blog entry on any of these things, but I figured it'd be better to keep it brief, rather than talk about IRS stuff for weeks on end.

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