Tax refunds slower this year?

[iono1]

Last year I filed on the 1st day the IRS was accepting returns on a Monday & by Friday the refund was in my account.  Both years I put it in with a company that filed it 1st thing Monday & my return was accepted that day.  This year my refund hasn't been approved yet, in the same number of days.  

I'm not sure when I'll get it, but things must be slower this year.  

[TheOtherMe]

I don't think it's slower.  I filed on Saturday before returns were to be accepted on Monday.  Accepted on Monday.  Bank account shows the refund will be in my account on Monday.  

My state is an entirely different story.  I won't see the refund until at least May.

[Deleted]

I learned that the hard way after my refund for my 2019 taxes (which, of course, w sone of the biggest I ever had) was interminably delayed due to COVID. I have to make estimated payments so now I just apply any refund to my liability for the current year and reduce my estimated payments.

[minnesotapaintlady]

I'd be hard pressed to accuse them of being slow on refunds already when they just started accepting returns on Monday. 

I think anything under 2-3 weeks can be considered prompt.  If you got it in 4 days last year that was pretty unusual.

[TheOtherMe]

The OP e-filed.  If you file by paper, there is no estimate of when you may get your refund.  Whatever you are told by your preparer or software, doesn't matter.

My software said 2 to 3 weeks.  It's taking one week.  I can't complain.  It does take longer as the system gets busier.

[phil5185]

There will be about 142,000,000 taxpayers this year - and the average federal refund will be about $3000.  So the gov will be sending out about $400,000,000,000 to the public during the next few months, ie $400 B.

The big puzzle is - why??  Why do people overpay their withholding by about $3000 every year? Why not simply prepay approx what your tax bill will be thereby retaining the use of their $3000 until april 15.  (For many people, that $3000 is borrowed on a CC and is costing over 16%.)

[minnesotapaintlady]

Jan 29, 2023 18:04:30 GMT -5 phil5185 said:

There will be about 142,000,000 taxpayers this year - and the average federal refund will be about $3000.  So the gov will be sending out about $400,000,000,000 to the public during the next few months, ie $400 B.

The big puzzle is - why??  Why do people overpay their withholding by about $3000 every year? Why not simply prepay approx what your tax bill will be thereby retaining the use of their $3000 until april 15.  (For many people, that $3000 is borrowed on a CC and is costing over 16%.)

A lot of people CAN'T avoid a refund due to refundable credits  There are 31 million taxpayers receiving the Earned Income Credit alone.  Then if people have unpredictable income or large bonuses at year end, it's going to be hard to guess.  Man, even my college kid had extra withheld from his paychecks this summer because the last couple years he's been just slaughtered with capital gains distributions that we never know what they're going to be until middle of December.

[Pink Cashmere]

Jan 29, 2023 18:04:30 GMT -5 phil5185 said:

There will be about 142,000,000 taxpayers this year - and the average federal refund will be about $3000.  So the gov will be sending out about $400,000,000,000 to the public during the next few months, ie $400 B.

The big puzzle is - why??  Why do people overpay their withholding by about $3000 every year? Why not simply prepay approx what your tax bill will be thereby retaining the use of their $3000 until april 15.  (For many people, that $3000 is borrowed on a CC and is costing over 16%.)

A lot of people aren’t all that financially savvy, especially some that don’t make that much money to start with. They prefer big refunds because they feel like they can make more things happen with a few thousand dollars at one time, and if it was spread out during the year, they would fritter it away instead of saving it. That’s how some of them get a down payment for a car, or a deposit on a place to live, or whatever. A lot of people’s lives are very different from the kind of things people on this board take for granted.

I know people that think like that. I guess at least they are being honest with themselves about what would happen if they did things the YM way.

[TheOtherMe]

I spent one tax season at H & R Block.  Many of their live for those large refunds.  They would say they could pay their back rent or pay off their credit cards.  

Pink Cashmere is correct when she says That’s how some of them get a down payment for a car, or a deposit on a place to live, or whatever. A lot of people’s lives are very different from the kind of things people on this board take for granted.

[Regis]

It's a psychological and emotional relationship with money for people who are wired differently than probably most of us on YMAM.  Dave Ramsey's techniques can work very well for these folks.  For those who are disciplined and can take the emotion out of money decisions, they make no sense.

[TheOtherMe]

My $84 us in my bank account.  I try for */- $100.  I hit it on both the federal and state returns.

[minnesotapaintlady]

I see my son's 2nd W2 is arriving in the mail today.  I just need to get his scary investment income stuff from the grandparents and I'll be able to start pulling things together.  I have to do all three returns simultaneously due to all the moving parts with the education credits and kiddie tax.

[Cookies Galore]

Husband got his W2 on Friday, so I should put all our info into Tax Act this week to see what the damage is.
We got a massive tax bill last year because of hubby - updated his W4 at work even though I told him it was unnecessary, he did it anyway, I didn't pay much attention to his pay stubs, realized when I got his W2 that HALF the amount of tax he usually had withheld wasn't [he usually had more taken out since I cover our insurance], we got a $3600 bill. I updated both our W4s for 2022 last March but we shall see if everything works in our favor.

[iono1]

Jan 29, 2023 18:04:30 GMT -5 phil5185 said:

There will be about 142,000,000 taxpayers this year - and the average federal refund will be about $3000.  So the gov will be sending out about $400,000,000,000 to the public during the next few months, ie $400 B.

The big puzzle is - why??  Why do people overpay their withholding by about $3000 every year? Why not simply prepay approx what your tax bill will be thereby retaining the use of their $3000 until april 15.  (For many people, that $3000 is borrowed on a CC and is costing over 16%.)

What do you mean by prepaying?  Do you mean periodically paying out of a paycheck like most people do & having your deductions adjusted to match your annual tax bill, or paying a lump sum, which would be worse than overpaying with periodic payments?   

I've done it both ways. 1) Calculating my annual tax bill & adjusting my withholdings to get around $0 when I fill out my taxes and 2) Having more withholdings than needed taken out of my pay.  When my expenses were higher, I chose option #1.  Now that I'm retired with a paid off house and fewer expenses, I choose option 2 because there's no way I will save the money in small doses, and I don't need as much up-front money. I fell into option 2 when I decided to have 25% of my Social Security withheld. Before Social Security I chose option 1.  So, when expenses are at their highest, which for me is usually around January, I get a nice sum returned to me.  This year I had a huge car repair bill on my 12-year-old car and the tax refund will come in very handy-I get the maintenance & inspection done in late December every year.   

[Tennesseer]

Federal tax refund hit my bank account this morning.  Filed January 23rd.

[minnesotapaintlady]

I did all of my son's return last night except the investment stuff.  He's set to get $600 back as things are now, but I'll bet he ends up owing at least $1000 when the capital gains hit.  Nothing like having your account down 20K and still have to pay $1600.  Not to be ungrateful, but I really am not thrilled with the grandparents choice of college savings. 

[TheOtherMe]

The way it was set up, he has been stuck with the taxes all of these years.

[Cookies Galore]

Jan 31, 2023 10:24:38 GMT -5 minnesotapaintlady said:

I did all of my son's return last night except the investment stuff.  He's set to get $600 back as things are now, but I'll bet he ends up owing at least $1000 when the capital gains hit.  Nothing like having your account down 20K and still have to pay $1600.  Not to be ungrateful, but I really am not thrilled with the grandparents choice of college savings. 

Yikes. My dad had my college fund in a vanguard account (in my name) but he paid any taxes due for me while the account was active. Now that I deal with all that on my own me no likey adulting.

[minnesotapaintlady]

Jan 31, 2023 10:50:59 GMT -5 Cookies Galore said:

Jan 31, 2023 10:24:38 GMT -5 minnesotapaintlady said:

I did all of my son's return last night except the investment stuff.  He's set to get $600 back as things are now, but I'll bet he ends up owing at least $1000 when the capital gains hit.  Nothing like having your account down 20K and still have to pay $1600.  Not to be ungrateful, but I really am not thrilled with the grandparents choice of college savings. 

Yikes. My dad had my college fund in a vanguard account (in my name) but he paid any taxes due for me while the account was active. Now that I deal with all that on my own me no likey adulting.

They paid the taxes the last couple years, but just what's due.  I hate to say, "Well, he would have GOT BACK $600 if it wasn't for this account..."

He turns 21 this year and I'm hoping the firm they're with just contacts him and transfers it over but I'm guessing it won't work that way.   

It just needs to be in a fund that isn't actively managed and traded.  I have money in a taxable index fund and it only throws out hundreds in LTCG/year, not thousands.  Last year he had 20K in capital gains on a 60K account!  Now the fund is down 45% this year and they still declared a big capital gain.  Only $12.50/share instead of $30 like last year, but he also has more shares, so not sure how bad it's going to be.

[Cookies Galore]

Jan 31, 2023 11:24:22 GMT -5 minnesotapaintlady said:

Jan 31, 2023 10:50:59 GMT -5 Cookies Galore said:

Yikes. My dad had my college fund in a vanguard account (in my name) but he paid any taxes due for me while the account was active. Now that I deal with all that on my own me no likey adulting.

They paid the taxes the last couple years, but just what's due.  I hate to say, "Well, he would have GOT BACK $600 if it wasn't for this account..."

He turns 21 this year and I'm hoping the firm they're with just contacts him and transfers it over but I'm guessing it won't work that way.   

It just needs to be in a fund that isn't actively managed and traded.  I have money in a taxable index fund and it only throws out hundreds in LTCG/year, not thousands.  Last year he had 20K in capital gains on a 60K account!  Now the fund is down 45% this year and they still declared a big capital gain.  Only $12.50/share instead of $30 like last year, but he also has more shares, so not sure how bad it's going to be.

Holy moly!

[minnesotapaintlady]

Jan 31, 2023 11:26:32 GMT -5 Cookies Galore said:

Jan 31, 2023 11:24:22 GMT -5 minnesotapaintlady said:

They paid the taxes the last couple years, but just what's due.  I hate to say, "Well, he would have GOT BACK $600 if it wasn't for this account..."

He turns 21 this year and I'm hoping the firm they're with just contacts him and transfers it over but I'm guessing it won't work that way.   

It just needs to be in a fund that isn't actively managed and traded.  I have money in a taxable index fund and it only throws out hundreds in LTCG/year, not thousands.  Last year he had 20K in capital gains on a 60K account!  Now the fund is down 45% this year and they still declared a big capital gain.  Only $12.50/share instead of $30 like last year, but he also has more shares, so not sure how bad it's going to be.

Holy moly!

Yeah, it sucks.  He's never even gotten a dime of this money yet either.   I had him take student loans figuring let the UTMA and 529 accounts grow an extra 4 years, but probably would have been better had I told the grands he needed funds so they would have cashed it in.  The 529 is just quietly sitting there not causing problems.  But this damn UTMA...

[iono1]

Finally in my account.  Earlier today it was listed as pending in my bank account with a 2/8 deposit date. Checked back an hour later & it was in there.  

[minnesotapaintlady]

Still waiting for the tax forms to do my kid's taxes.     About to submit mine as is. 

[jerseygirl]

We almost always owe so post last possible day

[susana1954]

I filed electronically on 2/6. It has been accepted and approved.  IRS website said I should receive on 2/14.  That isn't slow to me.

[TheOtherMe]

Refunds definitely get slower as tax season progresses.  I don't know what the professionals tell people now, but we used to tell clients 3-4 weeks.

Iowa is very slow with their refunds.  I will be lucky to see my $20 by May.

[minnesotapaintlady]

I plan on submitting mine tonight.  Got my kid's 1099's and am through crying over those, so basically just need to double-check all my entries and make sure I didn't miss any state deductions or credits...we have a lot of eligible line items for K-12 expenses.

[MN-Investor]

I owe both federal and state, so I'll hold off filing until April.

I'm frustrated, though, that Fidelity has still not issued a statement regarding how much of each fund includes federal interest. That's the only number I need to complete my return. They said the form would be available in early February. It's still not out there and early February is gone.

[minnesotapaintlady]

Well, I submitted Monday night late...like 11pm or so.  The refund is now showing pending in my bank account with a post date of 2/22. 

[TheOtherMe]

Feb 16, 2023 23:06:15 GMT -5 minnesotapaintlady said:

Well, I submitted Monday night late...like 11pm or so.  The refund is now showing pending in my bank account with a post date of 2/22. 

Very, very slow, wouldn't you say?