IRS announcement: April 2021 tax filing deadline is infirm

[shinobi]

Apparently merely filing your taxes might not help a whole lot:

Backlog of income tax returns is growing, delaying refunds to millions

https://www.cbsnews.com/news/tax-refund-delay-backlog-growing-irs/?intcid=CNI-00-10aaa3b

[glitch99]

I’m surprised it didnt mention this issue, unless I missed it?

I’d bet that a large number of that backlog is the fault of Congress deciding to exempt $10k unemployment benefits from taxable income, after forms were released and milllions of returns already filed.

I read an article in the last week that said the IRS was just starting (in early May) to process affected returns and applying their “fix” to adjust for the newly excluded income. That’s a solid three months of returns that have been sitting there waiting. It isnt the whole problem, but it has to be a significant volume that is only compounding other problems.

[Shandril]

I noticed when I e-filed at end of April a warning saying if I filed a paper version, I could be looking at several months before it get processed. I owed the IRS $4k and was going to e-file anyway but if I were due a refund, that would have scared me just a little bit.

But I didn’t suspect it was this bad that they were still processing some 2019 paper returns.

[glitch99]

@Shandril

I owed the IRS $4k and was going to e-file anyway but if I were due a refund, that would have scared me just a little bit.

It depends on if you need the refund for bills. IRS interest for delayed refunds far exceeds what is available from a bank, so I’d be perfectly happy with my 4-figure refund being delayed indefinitely.

[scripta]

What is it, 6%? And isn’t there some minimum delay trigger, like 6 months?

[Honkinggoose]

A couple of neighbors filed at the due date last year, got
fairly prompt (3 or 4 months, IIRC) refunds, and still got interest checks a couple of months after the refund. The trigger wasn’t six months last year.

[Shandril]

IIRC It think it was 45 days past the filing deadline. In this case, if you don’t need the money, yeah it may be best to file right on the deadline and let them take as long as possible.

[calwatch]

Folks paper filed in mid March and got the refund last week, and were paid 0.17% interest for the extra week or two beyond the normal delay.

[glitch99]

That doesnt sound right. The interest is (supposed to be, I thought) triggered from the due date of the return, not when it was actually submitted. Which at earliest would’ve been April 15, meaning their refund was within 30 days. Can you verify that?

[shinobi]

Woo Hoo!!

No more deadline for me! Everything is paid, both state and Federal.

I’m free as a bird until the fifteenth of next month (June estimated tax payments due then).

What a great day!

[calwatch]

I can confirm that they submitted their return mid March and the Where’s My Refund stated that the refund was issued May 14, with a refund amount 0.17% larger than the refund they should have gotten. This was a case where the return was kicked to the side due to a larger recovery tax credit claimed (my mom thought she never received a card, but turned out she did and so the refund was overstated by $600).

[glitch99]

@calwatch

with a refund amount 0.17% larger than the refund they should have gotten.

So nothing was specifically designated as being interest? It’s most likely just a simple adjustment they made to the return, for a transposed number or something similar. Especially considering that interest isnt supposed to kick in until after May 30 (and that’s only if they go by the original due date).

[jesselivermore]

@Shandril

I noticed when I e-filed at end of April a warning saying if I filed a paper version, I could be looking at several months before it get processed. I owed the IRS $4k and was going to e-file anyway but if I were due a refund, that would have scared me just a little bit.

But I didn’t suspect it was this bad that they were still processing some 2019 paper returns.

Yes, they’re yet to acknowledge my 2016 paper returns. My fault in that I didn’t mail till 10/1/20 (USPS took 2 weeks!) but thankfully b/f 10/15/20 . I wish IRS would allow PY e-file. I guess I’m in line with the 2019/20 paper returns now which are taking 6+ months

What’s a good fax # to correspond with them re: delays w/ my USPS delivery confirmation ? I hate their phone tree /wait

[ritholtz]

Is TX 2021 tax filing deadline extended to Jun, 15th? Was about to file extension.

Thanks

[xerty]

@ritholtz

Is TX 2021 tax filing deadline extended to Jun, 15th? Was about to file extension.

Yes.

IRS announces tax relief for Texas severe winter storm victims | Internal...

[ritholtz]

Thanks

[meed18]

@calwatch

Folks paper filed in mid March and got the refund last week, and were paid 0.17% interest for the extra week or two beyond the normal delay.

@glitch99

That doesnt sound right. The interest is (supposed to be, I thought) triggered from the due date of the return, not when it was actually submitted. Which at earliest would’ve been April 15, meaning their refund was within 30 days. Can you verify that?

@calwatch

I can confirm that they submitted their return mid March and the Where’s My Refund stated that the refund was issued May 14, with a refund amount 0.17% larger than the refund they should have gotten. This was a case where the return was kicked to the side due to a larger recovery tax credit claimed (my mom thought she never received a card, but turned out she did and so the refund was overstated by $600).

@glitch99

So nothing was specifically designated as being interest? It’s most likely just a simple adjustment they made to the return, for a transposed number or something similar. Especially considering that interest isnt supposed to kick in until after May 30 (and that’s only if they go by the original due date).

I filed my personal return on the due date, 5/17/2021. My refund shows on my bank statement as cleared on 5/25/2021. It is exactly $15.67 more than the refund on my return. Refunds on returns are whole numbers. I have no idea why the IRS gave me an extra $15.67.

[Honkinggoose]

@meed18

have no idea why the IRS gave me an extra $15.67.

To see if you will declare it as income on your 2021 return.

[scripta]

@Honkinggoose

To see if you will declare it as income

You’re probably joking, though I’m not sure if that joke is backed with actual tax knowledge. State income tax refund may be taxable income in the year received if that state income tax was itemized (to reduce federal tax) in the prior year. I don’t think a federal refund could ever be taxable income, but I don’t know what I don’t know .

[glitch99]

@scripta

You’re probably joking, though I’m not sure if that joke is backed with actual tax knowledge. State income tax refund may be taxable income in the year received if that state income tax was itemized (to reduce federal tax) in the prior year. I don’t think a federal refund could ever be taxable income, but I don’t know what I don’t know .

Jokes aside, if you receive interest on your refund money, that interest is taxable. Thus why the two times I recall being paid interest (one state, one federal, if I remember correctly), it was clearly detailed on a statement sent separate from the direct deposit.

Anyone who just gets a different amount deposited and no further detail, it’s fair to assume (for tax purposes) it was just an adjustment to the return, not interest.