IRS Is Struggling with a Huge Tax Return Delay
Tax return delay is the bane of any taxpayer. Those who owe are waiting for the other shoe to drop – their payment going through. While those taxpayers who are due a refund are understandably anxious to get their money. But just like last year, the IRS is struggling to tackle the existing tax return delay.
Paper Forms the Biggest Tax Return Delay
Taxpayers who filed their returns using paper forms are seeing the biggest tax return delay. The IRS says since the pandemic began, a six-month delay in processing a paper return is pretty much the norm. They also say that 10-month delays aren’t uncommon.
At the end of May, unprocessed paper return total was 18.1 million. Currently, the IRS has a backlog of 21.3 million paper returns. At this same time last year, the number was 1.3 million lower.
What slows down paper tax returns? The main reason is that an IRS employee has to manually type all the numbers in that paper return into the agency’s computer system. It’s slow work. And human error can creep into the process, slowing things down even more.
Tax Return Delay Factors for All Filers
The 2021 tax return has some special challenges. Namely, the Economic Impact Payment (what we usually call the stimulus payment) paid out in the spring of 2021. As well, Congress approved an advance payment of the Child Tax Credit. Many taxpayers state on their tax return they didn’t receive these payments. If they did get them and forgot, though, the error will automatically kick out the return for special review.
Other forms and filings that can cause delays include the Earned Income Tax Credit, Additional Child Tax Credit, as well as the Injured Spouse Allocation form. If the IRS needs more information, they will send their request in a letter.
Checking On Your Return’s Progress
The IRS’s online tool, Where’s My Refund[https://www.irs.gov/refunds], can be very helpful. It will show the official IRS status on your return: When they mark it as received, when they mark it as processed/approved, and a probable date to expect your refund.
Once your refund arrives, here are five ways you can invest it.
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