5 reasons you may not get a refund
Even if it appears the IRS owes you money, you may not get a refund if you owe back child support or defaulted on student loans -- or if the IRS can't find you.
This post is fromJacoba Urist at Wise Bread.
One big upside to filing your tax return, if you've already paid more than you owe, is getting money back from the government. How good does it feel to see that positive amount on the bottom of your return? Some families put their refund right into a college savings account, pay off their credit card, take a long-awaited vacation or simply use the money to make ends meet in these tough economic times.
But every year there are tens of millions of dollars the IRS won't be refunding. Before you count on the check from Uncle Sam, make sure you don't fall into one of these categories.
Here are five reasons you may not get a tax return, even if it appears the IRS owes you:
1. There are errors on your return.
Every spring, people make the same relatively straightforward mistakes on their tax returns that prevent the IRS from processing their refund on time. Common errors include putting down the wrong filing status, writing down an incorrect Social Security numbers or omitting information that's required for certain credits and deductions.
Double and triple check your return before you submit it, paying particular attention to anywhere you have to fill in names, numbers or addresses. Try to give yourself as much time as possible. Doing your return at 2 a.m. the day it's due doesn't leave you much room to catch any mistakes.
If you're preparing your own return, without the help of a tax professional, be careful that you've done your math correctly and you actually are due money back. Too often, I see people who run out and spend a phantom refund, only to have the rug ripped out from under them when they find out their calculations were off, and they aren't getting anything from the government this year.
Don't spend your tax refund until you can either physically hold the check in your hand or see the amount in your bank account.
2. You owe back taxes.
Nobody likes to hear this. The IRS is like the friend who holds a grudge for a long time and never lets go. If you owe federal or state taxes from previous years, the government can just yank the amount you're expecting back this year and apply it as an "overpayment" towards the taxes you haven't paid yet. It's "bye-bye, refunds" until the entire debt is gone.
With the job market the way it is, it's no surprise that more people are having trouble keeping up with their student loan payments.
Be aware the IRS can (and does) turn your refund over to the Department of Education to pay down loans you've defaulted on. The agencies do talk to one another, and while it may not happen right away, chances are they will catch up with you.
As hard as it may be to believe in the world of Facebook, Google Maps and Twitter, the IRS is holding onto $153 million right now in refunds it can't deliver.
Why? Because the agency has an incorrect mailing address and can't locate your residence to mail you a check. The IRS won't try to contact taxpayers by email or phone, so you might have no idea that they're holding on to your money.
Best thing to do? Always choose to have your refund deposited directly into your bank account if you can (and triple check those numbers to make sure they're right), especially if you know you're moving soon.
If you suspect you fall into this category, check in with the IRS on its website or hot-line to make sure the agency isn't holding on to money that's yours.
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