Myth 1: “It normally takes months to process a tax refund.”
While some may claim that mailed returns take an indefinite amount of time, this simply isn't true.
The IRS states that most refunds are processed and sent out within 21 calendar days. If you mailed the return, it's important to account for the time the U.S. Postal Service takes to handle and deliver it. If the return was filed electronically and you opted for direct deposit, the refund should arrive sooner.
Myth 2: “My refund hasn’t been direct deposited yet. Someone must have stolen it.”
Even if you chose to have the refund deposited electronically there are three specific circumstances under which the IRS will issue a paper check instead.
- Account Ownership. The IRS stipulates that they can only issue electronic refunds to bank accounts that are in your name, your spouse's name, or a joint account where you are one of the owners. An electronic deposit cannot be made if the account is not in one of these names.
- Financial Institution Policies. Sometimes, a financial institution will reject a direct deposit. It could be due to incorrect account details, the account being closed, or the bank identifying a mismatch with the account holder's information.
- Limit on Electronic Refunds. A single financial account or prepaid debit card can receive a maximum of three electronic refunds from the IRS. If the IRS needs to issue more than three refunds, the excess will be mailed as a paper check.
Myth 3: “My refund amount will always match the amount on the tax return I filed.”
It is reasonable to expect that the tax refund calculated on your tax documents is the same as the amount you will receive from the IRS. But the refund amount is not set in stone. The IRS update from December 22, 2023, provides reasons why the refund amount may differ from the amount initially calculated on the tax return.
- Offsets for Debts. Your refund can be used to pay past-due obligations such as federal tax, state income tax, state unemployment debts, child support, spousal support, or other federal non-tax debts like student loans.
- Changes to the Tax Return. The IRS may change your refund if they make corrections to the tax return after it has been filed. There are various reasons why this could happen, including discovering discrepancies or missing information. The IRS will notify you if they make changes to your tax return that affect the refund amount.
Myth 4: “I have to pay to find out the status of my refund.”
Scammers posing as IRS representatives aim to trick you into paying for information available for free on the IRS website. These bad actors may also falsely claim they can reduce the refund processing time in exchange for a fee. Don’t fall for it.
The truth is that you can check the status of the refund for free by using the “Where’s My Refund?” tool. This online IRS resource will show the processing status and the updated refund amount if the refund was offset due to changes made to the return.
For more information and updates, please visit the IRS Tax Season Refund FAQ page and HawaiiUSA’s Tax Resources.
