IRS tax refunds, amounts due, and recordkeeping

In this tax tutorial, you will learn about refunds, amounts due, and recordkeeping. Taxpayers receive refunds when their total tax payments are greater than the total tax.

 

How to Receive Tax Refunds

Refunds can be received by check in the mail or by direct deposit (electronic funds transfer) into a checking or savings account. Taxpayers must pay an amount due when the total tax is greater than their total tax payments. Payments can be made by check, money order, credit card, or direct debit (electronic filers only). It is important for taxpayers to keep good records in order to prepare their tax returns and support items on their tax returns.

This information is

  • reported on the individual income tax return.
  • used to determine the tax.
  • used to determine the refund or amount due.

 

Why do people get tax refunds from the IRS?

The government pays a taxpayer a refund when the taxpayer’s total tax payments are greater than the total tax.Taxpayers receive refunds from the government.Taxpayers must pay an amount due when the total tax is greater than their total tax payments.Taxpayers pay the amount due to the government.

Total tax payments include

  • federal income tax withheld.
  • earned income credit
  • refundable education credit
  • estimated tax payments, if any and
  • additional child tax credit, if any

Information About IRS Tax Refunds

When total tax payments are greater than the total tax, taxpayers can

  • receive the refund by direct deposit to a bank account.
  • receive a split refund dividing your refund, in any proportion you want, and direct deposit the funds in up to three different bank accounts.
  • receive the refund by check in the mail.
  • apply the refund to the estimated tax for the following year.

 

What can  you do with tax refund?

    • Buy U.S. Treasury marketable securities and savings bonds by requesting a deposit of their refund to a TreasuryDirect® online account.
    • Use their refund to buy up to $5,000 in U.S. Series I Savings Bonds.
    • Use their refund to begin a savings program and to plan for retirement.

 

Why Direct Deposit Tax Refund?

Direct Deposit Benefits
Speed receive the refund fast
Security no check to get lost
Convenience no need to go to the financial institution to deposit a check
Cost less than issuing a check

Direct Deposit Guidelines for Tax Refunds

 

Where's My Refund

It’s fast, easy and safe. You can go online to check the status of your refund 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail a paper return. Go to www.irs.gov and click on Where’s My Refund? If you do not have internet access at home, school, a public library, community center, etc., call 1-800-829-1954 FREEor 1-800-829-4477 FREE.

Lines 55 - 73 of Paul and Su-Mai Wong's form 1040

 

 Calculating Amount of Tax Refund Due

When the total tax is greater than the total tax payments, taxpayers can:

Pay by check or money order payable to the United States Treasury

  • include name, address, Social Security number, tax form, and tax year
  • submit payment with Form 1040-V

Pay by credit card

  • contact service provider via telephone or Internet
  • pay convenience fee

Pay by direct debit from a bank account

  • (only available for returns that are electronically filed)

Taxpayers who cannot make payment in full need to contact the IRS to discuss payment options.

IRS Recordkeeping for Individuals

It is important that taxpayers keep good records to

  • identify sources of income.
  • keep track of expenses.
  • prepare tax returns quickly and accurately.
  • support items reported on tax returns.

Typical records include:

  • checkbooks, check registers, monthly statements, and Forms 1099-INT
  • receipts, invoices, and sales slips
  • pay stubs and Form W-2

Some taxpayers use computerized systems to track income and expenses.

  • These taxpayers also need to keep original documents, such as sales slips and receipts.

 

Keeping Copies of Old Tax Returns

Taxpayers should print and keep copies of the tax returns they send to the IRS. Taxpayers need to keep tax-related documents for at least three years from the date the return was filed. Taxpayers receive refunds when their total tax payments are greater than the total tax Refunds can be received by check in the mail or by direct deposit (electronic funds transfer) into a checking or savings account Taxpayers must pay an amount due when the total tax is greater than their total tax payments.

Paying for Old Tax Returns

Payments can be made by check, money order, credit card, or direct debit (electronic filers only). It is important for taxpayers to keep good records in order to prepare their tax returns and support items on their tax returns.