Where’s My Refund? Where’s my EIP?

I am one of several Iowa State University Extension and Outreach Field Specialists that assist families with tax preparation and e-filing. This past week, I have been receiving at least one phone call a day from individuals wanting to know where their refund is. Many tell me they have already been to the website to check their status. The only place individuals should be checking their refund status is at the IRS.gov web site. Likewise, if you are wondering about the status of your Third Economic Impact Payment (generally $1400/person), the IRS web site is your source.

IRS.gov is the only safe place to check your refund or your stimulus payment

Refund Status. There are ONLY THREE QUESTIONS that need to be answered when using the Get Your Refund Status link on the IRS.gov website: 1) The Social Security number of the person listed on the return as the FIRST NAME on the return (not the spouse); 2) Your FILING STATUS (single, married filing jointly, head of household, married filing separately, or qualifying widow(er)); and 3) the amount of your refund, which is found on line 35A of page 2 of your federal tax return.

Stimulus Payment Status. Here again, the IRS has THREE QUESTIONS, although they are different. The needed information is: 1) Your Social Security number; 2) Your date of birth; and 3) Your mailing address. The mailing address can be tricky if you have moved recently. Generally, you should enter the mailing address on the most recent tax return the IRS has processed from you. However, if you have not filed a tax return in recent years, use the mailing address on file at Social Security or the Veterans Administration. Note: The tool to check your stimulus payment only relates to the third economic impact payment, authorized in the American Rescue Plan signed in mid-March. If you have not received either of the first two payments, your only option is to file a 2020 tax return, even if you have no income to report. The tax return allows you to claim the first two stimulus payments, and also sets the wheels in motion to process your third payment.

If you “google” where’s my refund and are taken to a website that asks for additional information, such as your salary, mother’s maiden name, or any other personal information, you are in the wrong place; you may be giving your personal information to someone who is stealing your identity.

~ Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Tax Refund? Plan Yearly

We generally budget by the month or by the week — we plan our spending in relation to our income, and that’s how we meet our regular expenses. It makes sense.

A tax refund is different, however. It’s a “bonus” that only comes once a year; it’s often the biggest single chunk of income we receive during the year. If you expect a sizeable tax refund, I suggest you consider the whole year as you plan how to use it. Here are a couple of ways you might do that:

  • In a typical year, are there some big expenses that throw a wrench into your financial routine? Perhaps your tax refund can help you be ready for those expenses. Examples: holidays, back-to-school time, car maintenance (planned and unplanned), summer weekends away,… it could be anything. Setting aside part of your refund to help cover those costs can be a great way to remove stress and unwanted drama from your financial life.
  • Tax refunds are often the way families make special purchases, such as furniture, a computer, or new appliances. Your refund can help you meet an important family goal. Again, though, it makes sense to consider the whole year before deciding. That might mean thinking ahead to all the possible special purchases you might want to make during the year, and prioritizing which of them is/are most important. An example from my imagination: I can imagine getting to summer and realizing you need a new lawn mower, and really wishing you had used your tax refund to buy a lawn mower! Thinking about the whole year can help you get the most value from any special purchases!

No one can foresee the future, and trying to plan for the year doesn’t guarantee you’ll think of everything that might come up. However, if you make an effort to consider the needs of the coming year, you are more likely to be satisfied in the long run!

What are your plans for your tax refund? We’d love for you to share!

 

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Refund Advance? Resist the Temptation!

Tax season is coming up fast.  If you’re one of the millions of Americans who expect a hefty refund, you may be excited — impatient, even.

It’s important to have realistic expectations. If your refund includes the Earned Income Tax Credit OR the Additional Child Tax Credit, the earliest you’ll receive your refund is around February 27, even if you file on the earliest possible date in January. Congress passed a law two years ago requiring that those refunds not be processed until after February 15, to allow plenty of time for the IRS to gather and process the information it receives from employers around the nation.

The best way to get your tax refund quickly involves a few key steps:

  • File an accurate and complete return.  Don’t rush to file before you even have all the documents and information you need.
  • Be sure you claim only the dependents and credits you are entitled to.
  • File electronically. When paper returns are mailed in they take weeks longer.
  • Receive your refund via direct deposit.

What about refund loans? If you believe some advertising, or the sales pitches of some tax preparers, getting a refund advance is the easiest way to get your refund quickly. It may seem easy, but it’s actually risky.  If anything goes wrong with your refund, the loan will be due anyway, and how will you repay it?  If you can’t repay it on time, you’ll face additional fees and perhaps debt collection headaches.

A refund advance is a loan; the lender gives you money now, and you probably spend it. Then when your refund actually comes through, the loan is automatically repaid to the lender. But if the refund doesn’t come through as planned, the lender will turn to you for repayment, even if you no longer have the money.

What could go wrong with your refund? Actually, a lot could go wrong.

  • In some cases, people’s refunds are withheld in order to pay debts owed by the taxpayer — debts such as unpaid student loans, back child support, or other government debts.
  • In other cases, irregularity in paperwork can delay refunds. This might not mean that you don’t get your refund, but it might mean a delay, which could cause you some headaches with the lender.
  • One more situation when people don’t get the refund they expect occurs when there was an error in preparing their return. Perhaps you weren’t entitled to a particular credit, or perhaps you are not entitled to claim a dependent. You didn’t mean to cheat on your return, but due to an error somewhere in the process, your refund is less than expected.

Refund advance loans are advertised as no fee/ no interest loans. The catch, however, is that you are required to file your return through the tax service where you obtain the loan; their fees are often much higher than fees charged by a non-lending tax service. What’s more, if you qualify for free tax preparation, then there would be no reason to pay any fee at all.

Resist the refund advance, and be secure in your plans for using your refund!

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Tax Refund: Party time?

Like many other folks, I received a tax refund recently.  A tax refund can be a major financial bonus.  The larger it is, the more choices we have about what to do with it: Have a party? Pay off debts? Put some away for retirement? Donate some to charity? Make an important purchase?  Go shopping? Take a vacation?

All of these are options.  None of them is the “right” or “wrong” option — what’s right or wrong for you depends on your priorities and your situation.  Generally we encourage people to think through all the options and consider the long-term benefits as well as the immediate benefits of the options.  In many cases (but not all) the best solution is to split the refund among several different uses.

Even though I just pointed out that it’s a very individual decision, there is one general rule I’d like to suggest.  If you find that each year at tax time you are “in a hole” financially, and your tax refund is the thing that gets you out of the hole, then I suggest you’re in a pattern you’ll want to change.  Yes, use your refund to dig yourself out of the hole (past-due utilites, holiday bills, etc), but then set the rest aside for emergencies or special needs.  If you have money to turn to at back-to-school time, or when the car needs repair, or for the high cost of summer day care, then you’ll be able to avoid digging a hole for next year.  (Or maybe you’ll still dig a little hole, but it won’t be so deep).

Setting that money aside means not making some purchases you might want to make.  But as you move through the rest of 2014, with money in reserve to carry you through some financial challenges, you may just decide it was worth it!

Set a goal for next January: avoid being in a hole!

~Barb

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Tax Refund? Use it Well!

Is a tax refund a major financial highlight of your year?  If so, are you making sure it provides some lasting benefit?

The last thing any of us wants is to look back in September and regret how we used our tax refund!

I completely understand using your tax refund to make your life more pleasant…  it’s common to spend part of it on some comforts.  BUT if you also think ahead and use part of your refund in ways that will improve your well-being in the long run, I’m positive you’ll be glad you did.  Here are my “Top Three” suggestions for using your tax refund:

  1. Pay off bills – pay the highest-interest bills first
  2. Save for needs in the coming year
    Predictable Expenses (back-to-school, holidays, etc)
    Emergency Funds — in case you have some medical bills or need car repair, set aside some funds that would get you through those little crises that come up.
  3. Long-term savings – it’s never too soon to save for retirement, for example!
    Does your employer have a plan?  Learn about it, and make sure to take advantage of any matching funds
    No employer plan?  You can open an IRA!
    *Even small amounts add up — contributing $500/year to an IRA for 30 years will give you an extra $40,000 in retirement (if your investment earns 6%).  That won’t make you rich, but $40,000 would pay some important bills after you retire!

– Barb

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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