Bill Oxford E + | Getty Images
If you’re still waiting for the tax refund, there’s silver: it could raise interest rates, and the rate will jump to 5% from 4% on July 1, according to the agency’s latest quarterly adjustment.
Typically, the IRS has 45 days after the deadline for filing declarations and sending returns. The agency then applies daily accruing interest, explained Tommy Lucas, a certified financial planner and registered agent of Moisand Fitzgerald Tamayo in Orlando, Florida.
Due to the federal short-term rate, IRS interest rates are currently falling below 8.3% annual inflation. But it’s still much higher than the average savings account.
While this sounds good, there is a downside: your interest is taxable.
More from Personal Finance:
Research shows that tax breaks are not the main reason for high-value charity
Only 18% of Americans plan to increase investment in the stock market this year
FinTok has helped this financial professional reach a new generation of investors
IRS interest payments rose to $ 3.3 billion in fiscal 2021, up 33% from 2020 for individual income, according to the U.S. Government Accountability Office.
Check return delay
The easiest way to check the return status is through the “Where is my return?” online tool or using the IRS2Go app. The portal shows three steps: receipt of return, approval of return and, if return has been sent, with the estimated date of deposit.
The IRS recently updated the portal to include revenue for 2019 and 2020, said Phyllis Joe Cuby, a registered agent from New York and president of the New York State Registered Agents Association.
“Prior to this update, the online return request only covered the current year’s refund, which means that anyone interested in a previous year’s refund had to call the IRS,” she said.
High call volumes have been a constant problem, and many taxpayers are struggling to contact IRS agents. In the first half of 2021, there were fewer than 15,000 employees who handled more than 240 million calls – one agent for every 16,000 calls, according to the National Taxpayer Advocate.
“I hope this is the beginning of further improvements to the IRS’s online return request tools, and I look forward to new improvements,” Kubei said.
The IRS lags behind
This has been a difficult period for the IRS as the agency struggles with backlogs related to the pandemic.
The IRS started 2022 with about 8.2 million paper declarations, leaving 1.7 million as of May 6, said Ken Corbyn, chief executive of the Taxpayer Agency, a subcommittee on oversight of the House of Representatives in May.
“Our goal is to return the IRS to a state of pandemic,” he said. “We need to process this document so we can get back to the case of providing the services that taxpayers deserve.”
In March, IRS Commissioner Charles Retig told lawmakers that he expects the backlog to be closed by the end of 2022.