According to an expert, IRS tax refund delays are a dread for the taxpayers in the country. To ensure a smooth tax refund process, gather your tax forms, like W-2s and 1099s, from your employers and financial institutions, as these forms are also sent to the IRS.
Filing a complete and accurate return, which includes all necessary forms, is vital to avoid any delays in processing. According to Bill Smith, national director of tax technical services at CBIZ MHM, matching software from the IRS is often the main issue for taxpayers.
The IRS can quickly spot missing forms because they already have copies, and fixing mistakes means sending an altered return, which slows down the process, according to Henry Grzes, lead manager of tax practice and ethics at the American Institute of CPAs.
Ensure a Smooth IRS Tax Refund
One of the best ways to understand how to have a smooth IRS Tax Refund is by filling out the right forms. The first thing to understand is what forms to fill.
According to Bill Smith, reviewing last year’s return is a good way to understand which tax forms you need, and it also helps to identify employers, income sources, and tax breaks you might have again this year.
However, if this is the first tax season for you, it is best to start by thinking about your job history and any sales or transactions you made, according to O’Saben, an enrolled agent and director of Tax Content and Government Relations at the National Association of Tax Professionals.
When to Fill Tax Forms?
According to Smith, some tax forms are due by January 31st, but others might arrive later in February or beyond. These could include a W-2 for wages, 1099-NEC for contract work, 1099-G for unemployment, and 1099-R for retirement distributions.
Grzes said that even if you did not get any slips for small amounts of income, it is important to report it, as you cannot avoid reporting income just because you did not receive a slip. Another assumption that often confuses taxpayers is the fact that they might receive a mailed paper form. As more financial institutions are taking a step towards going paperless, you might need to download tax forms like interest from savings accounts or investment earnings from your online accounts.
You might need various forms for tax breaks like 1098 for mortgage interest, 5498 for IRA deposits, 5498-SA for health savings account, 1098-T for tuition, and 1098-E for student loan interest. Corrected forms could take longer as they need to be reissued by your employer or financial institution.
The New IRS ‘Direct File’ Service
The IRS’s new free filing software called Direct File is available to eligible filers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming for the 2023 tax year.
To use Direct File, you need a Social Security number or Individual Taxpayer Identification Number for yourself, your spouse, and any dependents, along with a current driver’s license, state ID card, U.S. passport, or passport card.
However, Direct File has some limits as it is only for W-2 employees, Social Security, or unemployment income. Moreover, you cannot report other types of income, like capital gains, rental income, or money from payment apps or online marketplaces.
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