Tax Refunds May Be Delayed in 2017

The IRS announced yesterday that some tax refunds may be delayed next year for the 2016 tax filing season.  What does that mean for you?  If you are expecting a large refund of your federal taxes, you may want to increase your deductions on your federal W-4 so that you get more of your money now instead of possibly having to wait extra time for your refund.

Who is affected by the refund delay?  According to the IRS:

• Filers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) will not see their refunds before February 15th.  This is now a law.
• And pretty much everyone else can potentially be affected by delays due to the IRS attempting to be more vigilant about screening tax returns for fraud and identity theft.

The IRS does state that most taxpayers will see their refunds within 21 days after filing their taxes.

Below are some resources to assist you with checking your 2016 withholding:

• IRS Withholding Calculator
• IRS Publication 505 - Tax Withholding and Estimated Tax
• Tax Withholding - Complete information on withholding, estimated taxes, FAQs and more

Regardless of whether you think you will be affected by a refund delay, it is never a bad idea to check your tax withholding.  I did that myself recently and discovered we would probably owe money for 2016.  I quickly reduced my withholding to help ease the pain of sending the IRS a check.

For more information on this IRS announcement, go to this link.