One thing many Americans are learning as they wait for their late tax refunds, is that late checks from the IRS will earn interest.
This is a vital piece of information as frustrated taxpayers still wait for 2021 refunds in 2022. It’s beginning to look like 2022 will be just as challenging as last year.
The reason 2022 might be a challenge is because 2021 is still presenting itself as challenging before the next tax season has even begun.
Why is the IRS delaying tax refunds?
The IRS has a backlog of millions of paper returns.
The agency has too high of a workload and not enough manpower or resources to tackle it.
But there’s a bright side to the wait.
If your refund is delayed, the IRS will pay you interest
By law the IRS must pay interest beginning after a 45 day period of not receiving a refund.
The interest is not incredibly high though.
It’s normally around 3% per years.
For every $1,000 you’d get about $2.50 in interest.
In 2019 there were 14 million tax refunds that had interest paid on them by the IRS.
Make sure you get your refund faster
Speed up receiving your refund by filing as soon as you can beginning Jan. 24.
The longer you wait, the more likely your refund will be delayed.
If you file electronically instead of by paper you will very likely receive a refund faster.
This eliminates the possibility of your paper return or check getting lost in the mail.
You’ll also want to be sure all of your information is correct.
Incorrect information will lead to processing delays.
Direct deposit will be the fastest way to receive a refund once it’s processed.