Obtaining A Federal Income Tax Refund

Obtaining A Federal Income Tax Refund



Obtaining a​ Federal Income Tax Refund
You’re getting an​ income tax refund! Those are the​ words that every taxpayer would love to​ hear .​
a​ federal income tax refund occurs if​ the​ tax you​ owe is​ less than the​ sum of​ the​ total amount of​ refundable tax credits claimed and the​ total amount of​ withholding paid .​
For many individual taxpayers those federal tax refunds can be obtained through Earned Income credit,​ a​ real refund of​ overpayment of​ tax,​ or​ through an​ overpayment from previous years .​
Some people really believe that getting a​ large income tax refund is​ not the​ greatest thing .​
Instead they feel that the​ tax refund represents a​ loan paid back by the​ government interest free .​
Others use their IRS tax refund as​ a​ simple savings plan where they are surprised to​ get money back each year .​
Always remember that it​ is​ still better to​ get an​ IRS tax refund than to​ owe money to​ the​ government .​

Once you​ determine you’re receiving a​ tax refund,​ there are several options for actually putting that money in​ the​ taxpayer’s hands .​
Standard paper filing,​ electronic filing with direct deposit,​ rapid refunds,​ and refund anticipation loans are the​ options we have the​ choice of​ exercising,​ and for many refund anticipating individuals,​ the​ rapid refund or​ the​ refund anticipation loan is​ the​ refund of​ choice.
Since the​ advent of​ the​ computer age,​ and the​ great invention of​ the​ internet,​ the​ Internal Revenue Service (IRS) has been fairly quick to​ react to​ the​ benefit of​ electronic filing .​
the​ income tax returns are filed much faster,​ tax refunds are made faster,​ and money due the​ IRS can be obtained faster .​
Let’s take a​ minute to​ look at​ the​ different IRS refund options,​ and what each offers the​ individual taxpayer.

The standard paper filing,​ although many are more familiar with this method of​ filing,​ is​ slowing reaching obsolescence .​
There will soon come a​ time that the​ old system of​ paper tax filing will be entirely eliminated and replaced by the​ electronic tax filing methods .​
If you​ are still one of​ the​ dying numbers of​ Americans who files a​ paper tax return,​ you​ should anticipate receiving a​ tax refund in​ about six weeks; today,​ thanks to​ the​ great use of​ the​ internet,​ six weeks to​ receive a​ tax refund,​ seems like an​ extremely long time.
The rapid tax refund,​ that is​ rapidly replacing the​ standard paper filing,​ is​ an​ electronic method used for filing your federal income tax return,​ and allowing you​ to​ receive your refund in​ about 10-14 days .​
Much faster than the​ six weeks it​ used to​ take .​
There are usually no excess fees attached to​ this type of​ filing,​ and returns may be filed for free through many local,​ public access facilities.
The refund anticipation loan,​ however,​ is​ a​ little different .​
These must be administered by a​ tax professional through an​ established alliance with a​ financial and lending institution .​
There are several excellent choices available,​ and many qualified tax professionals to​ complete your tax return,​ you​ will however be required to​ pay a​ loan fee or​ a​ small interest fee for the​ opportunity to​ obtain an​ refund anticipation loan .​
There are several restrictions placed on​ receiving a​ refund anticipation loan,​ and some of​ the​ restrictions may affect many people .​
For example,​ if​ you​ owe back taxes,​ back child support,​ or​ liens and judgments,​ you​ can’t qualify for the​ refund anticipation loan .​
Most often,​ the​ individuals who apply for and use the​ refund anticipation loan are recipients of​ earned income credit,​ and their tax refunds are usually well into the​ thousands of​ dollars .​
the​ refund anticipation loan can be processed in​ as​ little as​ three hours,​ and back in​ the​ hand of​ the​ taxpayer by late afternoon; this is​ provided everything works exactly as​ planned .​
the​ higher interest rates charged by the​ bank product providers,​ and the​ higher processing fees charged by the​ tax preparers,​ equate to​ less money for the​ taxpayer,​ but many of​ these individuals don’t even blink when told how much it​ will be to​ process their federal tax return,​ they just want the​ refund immediately .​
This is​ just one more example of​ the​ instant gratification upon which our society chooses to​ operate .​
Even for individuals filing with the​ electronic returns,​ and choosing to​ have their funds direct deposited,​ the​ turn around time is​ usually no more than 10 to​ 15 days .​
you​ would think that a​ turn around of​ less than two weeks would be quick enough for many taxpayers,​ but typically,​ the​ bigger the​ federal income tax refund,​ the​ faster the​ necessary return .​

It would seem to​ me that this is​ just another way for the​ system to​ profit from the​ poor; as​ it​ is​ usually the​ poor that qualify for the​ earned income credit tax refunds,​ and these can be extremely large,​ especially for families with two or​ three dependents .​
in​ all reality,​ avoid refund loans if​ possible .​
They are highly expensive .​
Wait patiently for your federal income tax refund and keep every penny for yourself.




You Might Also Like:




No comments:

Powered by Blogger.