The tax season for the year 2025 is officially underway, with the Internal Revenue Service (IRS) starting to accept tax returns on January 27. For many Americans, tax refunds are not just expected; they are often relied upon to help ease financial strains. Surveys indicate more than one-third of taxpayers count on these refunds to meet their daily expenses, and among millennials, this dependency rises to nearly 50%.
Understanding the process of filing taxes and tracking refunds is key as more people anticipate their returns amid rising living costs and inflation. The IRS has made it easier for taxpayers to keep tabs on their refunds with its 'Where’s My Refund?' tool, which provides updates on the status of tax returns.
According to the IRS, "most refunds are issued in less than 21 days." For those opting to file their 2024 federal income tax returns electronically and choosing direct deposit, funds will likely appear within three weeks, barring any complications. Paper filers, on the other hand, can expect to wait approximately six to eight weeks after the IRS receives their documents. The timeline hinges on accurate and complete filings, which is imperative to avoid delays.
The IRS has specified what information taxpayers need to check their refund status: Social Security number or Individual Taxpayer Identification Number (ITIN), filing status, and the exact refund amount. The IRS updates refund information daily, which means taxpayers should avoid over-checking and can afford to be patient—something not often easy when budgeting for essentials.
The current tax season brings with it important deadlines. The typical filing deadline is April 15, 2025, providing taxpayers with ample time to complete their returns. Those needing additional time can apply for extensions, though it’s important to note this extension is only for filing and does not defer payment obligations. If payments are owed, taxpayers must still meet the April 15 deadline.
With many individuals counting on tax refunds, reasons for such reliance include rising living costs associated with necessities like housing and groceries. A recent survey by Qualtrics for Intuit Credit Karma found, "of those who depend on their refund to make ends meet, nearly half (45%) say it’s because of the rising cost of living and necessities." Inflation and financial pressures lead many to anticipate refunds as necessary relief.
Taxpayers must also be aware of potential delays. If the IRS encounters complications or needs additional information, they will reach out via letter, resulting in postponed refunds. Those checking their refund status might discover, as the IRS notes, "Once your refund is marked sent, it may take 5 days for it to show up in your bank account or several weeks for your check to arrive in the mail." Keeping this timeline in mind can help manage expectations during tax season.
Filing electronically remains the quickest way to get refunds processed. The advantages of direct deposit cannot be overstated; opting for this method can expedite funds arriving directly to one’s bank account after the IRS processes the return. The report indicates, "If you file electronically and choose direct deposit, your refund will probably be issued within 21 days," reflecting the governmental agency's commitment to efficiency.
Delays can happen, especially just before the tax deadline. Historically, wait times are longer during peak filing days—especially Mondays and Tuesdays. The IRS advises taxpayers, "Wait times are longer on Mondays and Tuesdays, during Presidents Day weekend, and around the April tax filing deadline." Correct planning can help avoid the rush and potentially troublesome wait times.
Overall, as tax season gears up, the reliance on refunds for everyday financial support emphasizes the importance of timely and accurate filings. With the IRS continually working to improve service levels and keep wait times down, the 'Where’s My Refund?' tool provides useful guidance for many awaiting their returns. This season, being informed and prepared can make all the difference for taxpayers anticipating their refunds.