If you are one of the lucky 67 million or so taxpayers who have received a refund in 2013, chances are that you made an overpayment of tax (although, admittedly, some refunds are due to refundable tax credits).
When the government owes you – instead of the other way around – you can ask for your money to be refunded to you during the year or you can choose to apply all or part of the overpayment to next year’s estimated taxes or tax bill. While it’s often a good idea to “prepay” using money that you likely won’t miss since it didn’t end up in hand, think carefully before you check the box: you cannot change your mind and have any of it refunded to you after the due date (without extensions) of your 2013 return.
If you opt to have your overpayment refunded to you, you can ask for a paper check. Traditionally, that was the most common way to get a refund. However, 85% of all tax refunds issued this season haven’t been paper checks at all: they’ve been direct deposited. If you request a paper check, be sure to cash it quickly: they have a shelf life. IRS refund checks expire the last business day of the 12th month of issue.
You can have your refund deposited directly into your checking or savings account by making the election directly on your return. You’ll need to indicate your routing number, account number, and type of account. Be careful when entering those numbers: if the IRS can’t deposit your check due to your error, they’ll send a check instead.
If you don’t need the cash on hand, you can consider depositing your refund to a TreasuryDirect account to buy U.S. Treasury marketable securities and savings bonds. It’s easy and you can do it online.
You can also split your refund. If you want to have your refund (or part of it) directed to up to three accounts at a bank or other financial institution OR if you want to use at least part of your refund to buy up to $5,000 in paper Series I savings bonds, you’ll need to fill out federal form 8888, Allocation of Refund (Including Savings Bond Purchases). That form should be sent along with your tax return when you file.
If your refund for 2013 is bigger than expected – and you don’t expect anything to change in 2014 – you may want to decrease the amount of income tax withheld from your pay. You do this by adjusting the form W-4 on file with your employer. Generally, the more exemptions you claim, the less tax is withheld from your check. If you want to withhold less tax, increase your exemptions; in contrast, if you didn’t withhold enough during the year, decrease your exemptions.
If you have questions about the status of your refund, you can use the Where’s My Refund? tool on the IRS website. You only need to check once a day: it’s updated once every 24 hours, usually overnight. If more than 21 days have gone by and you haven’t received your refund, you can try giving the IRS a call at 1-800-829-1040 but be prepared to wait!
