You’re probably excited about getting the funds from your IRS refund status in the mail or direct deposit, but you may be in for a nasty surprise. Thousands of taxpayers will be disappointed this tax season when their refund status money is diverted elsewhere. There are a number of reasons why this may be. Here are the top five that may leave you upset come April.
1. You Owe Student Loans
One of the most common things that eats into your tax refund status is failure to pay student loans. The IRS will work with the company who is seeking payment on those loans. They can garnish a portion or the entirety of the money from your tax return, leaving your tax refund status a big, fat zero.
Of course the best way to avoid this is to pay your student loans on time. However, in today's economy, many are experiencing hardships and finding that grocery or utility bills are more immediate. If this is the case, contact your lender or the Department of Education for more on your options before your tax refund status is affected.
2. You Owe Back Taxes
If you owe any taxes from years past, you might find yourself with a less-than-desirable tax refund status. The IRS will, along with the Treasury Offset Program, use the money you were expecting to get back to pay off those old debts. They will often attach fees too, meaning a zero or negative number associated with your tax refund status.
3. You Owe Child Support
When you let your child support payments slip, it doesn't go unnoticed. Not only do child support organizations notice, they will let the IRS know you are delinquent. After the money from your IRS refund status is taken, they may move on to wages from your job. To avoid losing funds from your refund status, keep up with your child support. If you do, you could also claim them on your taxes for a higher refund status.
4. You Owe Alimony
Like child support, paying alimony on time is important. The IRS will be notified of your missed payments. They may then take the funds from your refund status to make up the missed alimony payments. Be sure to keep up with these payments as you may be able to claim them on your taxes like child support. This might also lead to a greater IRS refund status.
5. You Made Errors on the Form
You may not owe any money on anything, but there are still other reasons why your refund status money won’t be coming in. For instance, if you made a number of errors on your tax forms, the refund status you calculated could be incorrect. If there are enough errors, the IRS will add fees to your account. If there are enough fees, your refund status will be wiped out.
Make sure your tax return is accurately filled out before sending it. If you realize an error after you send it, then quickly fill out a 1040X tax form. This will help avoid problems with your IRS refund status.