Most folks get a tax refund from the U.S. Treasury each year.
And most of the time, those checks show up in our snail mail boxes or are directly deposited into our bank (or saving or IRA) accounts without any problem.
But now and then, something goes wrong.
It could be a seemingly good error.
Your tax refund is larger than you expected. That actually happened to me one year.
Or it could be the opposite. Your refund check is smaller, a lot smaller, than the amount that was indicated on your tax return.
Making do with more tax money: When your refund is larger, go ahead and put it into your account if it wasn't already directly sent there by the Internal Revenue Service.
But don't spend it until you hear from the IRS as to why it was so generous.
If it turns out that the tax agency goofed up, you'll have to give back the excess and that's easier to do if you still have the cash on hand.
Learning to live with less tax money: If your refund is smaller, you'll hear from the IRS about that difference, too.
In many cases, it's as simple as a math error on your part.
Or the shortage could be due to the Treasury's offset program.
This special collection
process, operated in conjunction with other federal agencies as well as state (and sometimes local) tax departments, allows those other tax officials to collect
from federal tax refunds any money they are owed.
The money
comes out before the taxpayer ever sees a penny from the IRS. A typical case is unpaid child support by a deadbeat dad or mom.
And, of course, if Uncle Sam says you owe him money, say for federal student loan payments you've ignored, he'll take his cut of that out of your refund, too.
Return of Weekly Tax Tips: The bottom line is that if your refund is not what you expected, find out why before you do anything with the money.
You can read more about dealing with wrong refunds in my Bankrate.com story, which is the first Weekly Tax Tip of 2013.
Now that we've made it through the high tax-filing season, I'll post a new tax tip every Wednesday in the upper right corner of the ol' blog's home page.
Some of these tips, which will run through 2013, will help us filing procrastinators who got an extension until Oct. 15 to file our 1040s. Others will offer 2013 tax planning advice.
Regardless of your tax situation, check them out each week. And if there's a topic you'd like to see featured as a Weekly Tax Tip, drop me note.
You also might find these items of interest:
Daniel
It’s been two months since I filed and I still haven’t gotten an explanation as to why my federal refund was $210 less than expected.
I assume there was some math error, but it’s killing me not knowing what it was!
David
Great Post. I recently got my refunds back from MD and Fed but DC was withheld for stupidity. I called up the mayor’s office and they helped me out. Lesson learned.. always work your way down the food chain!