Do you need your tax refund now? Here’s what you can do.
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Why do you need your tax refund sooner?
There may be several reasons you need your tax refund sooner.
- Pay bills
- Pay down debt
- Top off your IRA
- It’s your money, not Uncle Sam’s
When should you file your tax return?
To get your tax refund faster, file your tax return as soon as possible. Most tax preparation software becomes available in early to mid January.
Tax refunds go out as you file. You don’t need to wait until after April 15th. So the sooner you file, the sooner you get your money back.
How should you file?
File your tax return electronically whenever possible. The IRS automatically processes electronic returns. You can get your refund in just a few weeks.
Paper returns have a longer processing time in normal times. That’s because the IRS enters them by hand. Add several additional weeks for processing. Plus, it also takes time for your paper return to go through the mail.
During COVID-19, paper returns have been delayed for months. The IRS stopped processing paper returns early on. Now that they have resumed processing returns, they’ve been very slow getting through the backlog. In late 2020, people who filed their 2019 tax returns early were still reporting they hadn’t had their return processed or gotten their refund.
Expect potentially long COVID-19 related delays getting your tax refund if you file on paper in 2020. To get your tax refund quickly, file electronically unless you have a special circumstance making you ineligible for electronic filing.
How should you request your refund?
The fastest way to get your tax refund is via direct deposit. The IRS has faster processing for direct deposit versus checks. In addition, you don’t need to wait for the check in the mail and then go to the bank to deposit your check.
Can you get your tax refund before you file?
You may be in a situation where you substantially overpaid your taxes and want to get your money sooner. For example, you paid estimated taxes but your income was lower than you estimated.
You can’t get your tax refund without filing. You will need to wait until at least January to be able to file your tax return so that you can get your tax refund.
What if you’re waiting on tax forms?
You don’t necessarily need to wait for tax forms to file your tax return if you know the numbers. For example, you’re waiting to get a 1099-NEC that you know is for $10,000. You can just enter the $10,000 on your tax return.
There is a small chance that filing before you get your tax forms will get you audited by the IRS. For example, they may not match the information you entered on the form. This could be because you used a slightly different payor name or tax identification number. However, as long as your income and expenses are correct, you can clear this up with a simple written explanation showing why you paid the correct amount of tax.