Looking forward to a big fat refund check this year?
Maybe you’ll use it to pay down debt or treat yourself to a big purchase like a TV. Or maybe that check will help you put some savings in the bank or fund that summer vacation you’ve been dreaming about in this cold weather.
Well, money expert Clark Howard would like to have a word with you about why you’d be better served with a reality check instead of a refund check…but more about that later!
First, let’s tell you when you’re likely to get your money!
You can look forward to your refund on this date….
Twenty-one is a magic number for the Internal Revenue Service (IRS).
That's the average number of days the IRS says it normally takes for the turnaround of a tax return when a refund is due to the taxpayer.
But the way you file and how you request a refund can have a lot of impact on how long it takes for your money to show up.
Case in point: If you e-file and select direct deposit, you’re likely to get your refund a lot more quickly than if you mail in a paper return and wait for a paper check to be mailed back to you.
With that in mind, we here at Team Clark have put together a rough schedule of when you can expect your refund.
We’ve taken into account the date you file; the method of filing; and the way you request your refund.
Just remember, this chart is is no way binding nor is it guaranteed in any way. It’s just a rough estimate of what to expect!
Now, a word about tax refunds in general…
But if you’re really into the idea of getting a big refund check, you need to check yourself first!
“People will often come up to me around tax time and happily ask for advice on what to do with their giant refund,” money expert Clark Howard says. “They treat it like it’s found money or some kind of windfall. But it’s not.”
Getting a big refund means you’ve overpaid your taxes all year and didn’t have access to that money all year long. So it’s been sitting in government coffers and probably earning interest for them instead of going to work in your own life.
Work with your payroll department to adjust your withholding so you approach being tax-neutral next year — meaning that you get as close as possible to not owing additional money at tax time and not getting a refund either.
Here’s how this plays out in the real world: Let’s say you typically get a refund of $1,200 every year. Try reducing your withholding at work by $100 a month and have your bank or credit union automatically transfer that $100 each month into a savings account.
You’ll never see it, so you’ll never miss it. But the end result is that you’ll build your savings and earn interest all year long.
Just one word of advice…You might want to wait until after February 15 to talk with your HR or payroll people. That's because there are brand-new withholding tables for companies to follow when calculating your paycheck going forward.
Businesses have until the middle of February to adjust the way they do their withholding to comply with the new tax law.
If you talk to them too soon, you’re likely to get blank stares because they’ll be overworked and frazzled while trying to get on board with the new withholding rules. Wait until they have everything running smoothly, then have that talk with them!
The IRS phone scam is alive and well