Tax day has come on gone and most of you have already filed your paperwork and sent mailed the check to the IRS. One of the major perks of filing taxes is that you are more than likely to get a refund from the government. You can use your refund in a number of ways like paying off old debts, stashing it away as a part of your savings or simply investing it. In these hard times when credit conditions are tight and economic growth is stilted, a tax refund is a welcome gift.
It is quiet a troubling fact that there are millions of dollars collecting dust, sitting in the IRS’ coffers. Every year the IRS doesn’t send out refund checks even though a large number of taxpayers are expecting to find a check for a significant sum of money in their mail. There are many reasons why taxpayers expecting refunds don’t receive them. The IRS will hold on to your check or use the refund to meet requirements. Here are a few reasons preventing people from receiving their tax refunds.
According to the IRS the commonest error that prevents them from dispatching refund checks or processing their applications are the tiny errors that people make while filling up their paper work. Although the mistakes are relatively insignificant, the sheer volume of applications to be processed makes it next to impossible for the IRS officials to go through every piece of paper with a fine toothed comb. Incorrect social security numbers, missing information, wrong withholding figures and filing statuses make the process very difficult. Missing information about specific deductions and credit lines also add to the mess.
It is advised that you always triple check your application and paperwork before you seal it up in an envelope and drop it in the mail. Things that you bother about the least like spelling errors in your name, contact number or address are more likely to occur. Try to start off with your paperwork as early as you can simply because if you wait to do your taxes in the last few hours before tax day, you are more likely to make serious errors.
Back taxes, student loans and child support
The IRS doesn’t take the failure to pay your taxes on time very likely. Even if you can’t cough up the money to pay your taxes by the final due date, the IRS has other methods to get their fair share. Most people think that the IRS resorts to putting a tax lien on your property as a de facto practice. This is not always true. The IRS can keep your refund and apply it towards paying back taxes. In other words, if you owe the IRS and you are expecting a refund check, you sadly might end up with less money than you were thinking off receiving or no money at all.
In case your college education was financed through a federal student loan which you defaulted on, the IRS can also take your refund and apply it towards paying off your loan. Although the Department of Education and the IRS are in communication with each other, the effect of defaulting on your student loan may not be immediately felt as far as your tax refunds are concerned but rest assured that the IRS will catch up.
Defaulting on child support payments will have one of the more far reaching impacts on your yearly tax refund. It might take some time for all the necessary federal agencies to unify their actions and come after you but it will happen. Even if the child is above 18 years of age when you are not legally liable to pay for child support, the government can still place a levy on your yearly tax refunds to pay off any outstanding amount you owe for child support.