Doing your taxes isn’t fun, but many of us are rewarded with a refund when we’re done. It can also be quite substantial. The average tax refund in 2020 was $2,827, and some people got even more.
If you need the money this year, your 2021 tax refund probably can’t come fast enough. Here are some steps you can take to get yours faster so you can forget about your taxes again until 2022.
1. Start gathering your documents
You may not receive your W-2s or 1099s until the end of the month, but you can start gathering your other documents so you don’t have to search for them later. Write down how much you’ve contributed to your retirement accounts and gather receipts for any charitable donations, large medical bills, or other expenses you plan to write off.
Gather all these documents in an envelope or folder so you have them handy when you decide to do your taxes. When you receive your tax documents from your employer, add them to the file as well so that everything is in one place.
2. File your taxes as soon as possible
Although you technically have until April 18, 2022 to file your 2021 tax return, it’s best to file much earlier if you can. After all, you can’t get your tax refund until you file your return.
Deferring your taxes can also have unintended consequences. Identity thieves often spend tax season filing false statements so they can claim reimbursement from other people. If this happens to you, you’ll have a major headache dealing with the IRS before you see a penny of the money owed to you.
3. File electronically
Submitting a paper tax return is still an option, but it’s a much slower process than e-filing. Many people today use online tax software, which can help you file your taxes online as soon as you are done entering all your information. For some people, filing your federal tax return online is free.
4. Have your refund deposited directly
If you qualify for a tax refund, you can receive it by mail or direct deposit. About 80% of taxpayers choose to receive their refunds by direct deposit, according to the IRS, because it’s faster.
If you have a bank account, setting up direct deposit is pretty straightforward. Simply select this as your preferred delivery method when submitting your tax return and enter your bank’s routing number and account number. The government will deposit the funds as soon as your return has been processed.
Those without a bank account should consider opening one. Or, if you have a prepaid debit card, you may be able to have your refund deposited into that account. Check with the debit card issuer first to make sure this is allowed and to determine the routing and account number to list on your tax return.
How to know when you will receive your refund
If you follow the four steps above, you should get your refund quickly. But if you want to know exactly where he is in the process, you can use the IRS Where’s My Refund? tool. All you need is your social security number, your tax status, and the exact refund amount.
You will be able to start tracking the progress of your refund approximately 24 hours after filing electronically or approximately four weeks after filing a paper return. The government usually updates this tool every night.
In most cases, you will receive your tax refund within 21 days of filing your return, but it all depends on your situation. Some tax returns are more complicated than others and take longer to complete. That’s why following these tips is crucial if you want to get your money back as quickly as possible.