The Internal Revenue Service processes federal income tax returns and issues tax refunds after the agency reviews tax liability and taxes paid. You will already know if you will receive a refund or pay taxes to the IRS upon finishing your return.
Because we pay taxes throughout the year gradually, there is a chance of overpaying, thus, resulting in tax refunds. While the what and hows of tax refunds are pretty self-explanatory, the amount of time we wait for the refunds we anticipate has a lot of things that go into it.
How tax refunds are processed?
At first glance, calculating and looking at how tax refunds are calculated is beyond easy. The Internal Revenue Service first looks at the information returns you attached to your tax return and compares it with the same returns issued to either the agency or other federal agencies. This is to ensure that the information returns attached are legit and the money amounts are correct.
Once the IRS reviews these and looks at the taxable income, tax liability, and the tax paid during the tax year, the IRS issues tax refunds. It generally takes between two and four weeks for the IRS to send tax refunds. If filed electronically, it will take less because tax preparation services handle the majority of the job for the IRS and the only thing that is left to do is sending the refunds.
You can expect to wait between three and six weeks for your mailed-in tax return to be processed and eventually get your refund.
Get your refund quickly
One of the most helpful things you can do to get your tax refund quicker is by submitting your return electronically. As we’ve broken down above, it takes significantly less time for the IRS to process these refunds, eventually resulting in a quicker turnaround time for tax refunds.
Another thing you can do to get your refund quickly when you send a mailed-in return is to organize your documents and properly attach them to your refund. If the number of tax forms used alongside your return is more than you can staple them, include everything in the same envelope/package and mail to the IRS. These will ensure that you’re getting your tax refund quickly in 2022.
Changes to tax refunds in 2022
The biggest change or the brand new thing to the tax refunds is the new tax credit, recovery rebate credit. This credit is also known as the stimulus payments which most taxpayers received advanced payment. If you haven’t received a stimulus payment in 2021 or 2022, you can claim the recovery rebate credit on your return to boost your refund significantly as it’s fully refundable.