Though annual tax return filing may appear to be quite complex at first sight, it is, in fact, a simple procedure. That is the document where you calculate your total earnings and deduct all the eligible credits and deductibles. The amount that is left after the deductions is your total taxable income, and you can calculate the amount of tax you need to pay by multiplying the taxable income with the prevailing tax rate.
However, in most cases, people prepay their income tax using deductions from their regular paycheck. In such cases, if the amount deducted from the income as the tax is higher than the tax actually owed by the person after deductions, then a refund of the tax is received by the individual.
How Long Does It Take For Tax Refund To Arrive?
After you have filed your taxes, you have to wait for the Internal Revenue Service or IRS to review your return, only after which your return will be issued to you. In most of the cases, the IRS issues a tax return within 21 days of filing the tax. However, it is to be noted that it can take a little longer in some cases. The IRS issues approximately 9 out of every 10 tax returns within the period of three weeks and only 10 percent of the total applications or filings remain till after the deadline. Perhaps knowing how the tax return is actually evaluated will help you understand better the concept.
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How Is The Tax Return Evaluated?
Once you have completed the tax return filing procedure from your end and submitted all the documents, the IRS auditor then confirms the information you have provided through your documents. This process includes appropriating the total income you have claimed in the given year from several sources.
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While an employee has to use the Form W-2 for each employer who has paid him salary or wages, an independent contractor has to use the form W-9 for filing tax returns. If you ever happen to use the wrong form and enter incorrect figures, then the auditor will have to spend more time analyzing your documents, which will delay the tax return process.
What Are The Other Factors?
How much you will have to wait for your tax refund also depends on the number of tax deduction and credits claimed by you since the IRS officer will have to spend proportionally more time examining and verifying those credits and deductions. However, this shouldn’t imply that you should ignore presenting valid deductions in your documents; always give IRS the true information through your documents.
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I read somewhere that the IRS reportedly has more than 1 billion dollars as unclaimed tax returns which are just waiting to be claimed by people. Many people fail to file their tax returns and end up losing their hard earned money. All that is need to be done is filling up a few forms and the money that has wrongly been deducted from your salary comes back to your pocket in a matter of days.