Get ready for Taxes: What to know about the amount of a tax refund

Blog # 73

Get ready for Taxes: What to know about the amount of a tax refund

 After filing a tax return, a taxpayer will know whether or not they are to receive a tax refund. Sometimes, however, a taxpayer’s refund will be a different amount than they expect.

Here are some reasons a taxpayer’s refund might be less than they thought:

• Financial transactions happening late in the year can have an unexpected tax impact if a 2019 federal income tax withholding unexpectedly falls short of the tax liability of the year. Certain transactions can influence taxpayer’s anticipated refund. This includes things like:
• Year-end and holiday bonuses
• Stock dividends
• Capital gain distributions from mutual funds and stocks
• Real estate or other property sold at a profit

If this happens taxpayer’s can still make a quarterly estimated tax payment directly to the IRS for the tax year 2019. The deadline for making a payment for the fourth quarter of 2019 is Wednesday, Jan. 15, 2020.

• A taxpayer’s refund can be used to pay other debts a taxpayer owes. All or part of a refund can go to a taxpayer’s
• Past-due federal tax
• State income tax
• State unemployment compensation debts
• Child and spousal support
• Other federal nontax debts such as student loans

A taxpayer receives a notice if their debt meets the criteria for an offset.

Any remainder of refund will be sent in a check or direct deposit as the taxpayer had originally requested on the return.