Were you among the lucky 2022 tax filers to already receive a tax refund?
Perhaps, tax filers have taken advantage of hidden refunds. Regardless of why they are getting it, there are nearly 52 million tax filers who have already received refunds. According to the Internal Revenue Service (IRS) refunds total $171 billion 2021 tax year (as of March 18, 2021).
Not everyone will be happy with their refund. Sometimes, taxpayers calculate how much money they’re getting back, file their taxes, and then discover that the IRS has deposited a different, lower number into their accounts.
What the heck is going on? Lisa Greene-Lewis, CPA and TurboTax expert explains in the video above.
Quotes | Tax Refund Less Than Expected? Here’s Why Lisa Greene-Lewis, CPA and TurboTax Expert Lisa Greene-Lewis, CPA and TurboTax ExpertRecommended: Ways to Increase Your Tax Refund You Never Considered
Video Transcript:Lisa Greene-Lewis: Yeah, there are some standard reasons why people’s refunds could be adjusted. But this year, especially with the advanced child tax credit payment, millions of people received those advances in 2021. And if you don’t report the correct amount that you received from the IRS, starting back in July of last year, you will see an adjustment on your return, as well as your refund. The IRS did issue a new letter. It’s Letter 6419.
Tracy Byrnes: All right, but we’re getting all these letters from the IRS. Do they come in the mail? Do I have to go online to find them? How do I know where they are?
Lisa Greene-Lewis: Yes, so the new IRS Letter 6419, did come in the mail. You should’ve received it by January. So I would make sure that you have that letter in front of you when you do your taxes. Or if you have someone do your taxes, you want to enter the correct amount that you received that’s on that letter.
Tracy Byrnes: OK, so go check your tax file. The incorrect reporting of the third stimulus also caused some problems, didn’t it?
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Lisa Greene-Lewis: Right. The IRS also issued a new letter that they sent out that you should have had by January as well, and that’s Letter 6475. And that will report the correct amount of the third stimulus you received. So you want to enter that you did receive that so that you’re reporting the correct amount you received. Or let’s say you didn’t receive it all and you want to claim the recovery rebate credit, then you want to have the correct reporting so there are no delays in your return and no adjustment of your refund.
Tracy Byrnes: Right, because the IRS has these letters as a reminder. So the IRS knows the right numbers. You need to input the correct ones. That’s the reason for the differential in your refund amount.
The advanced child tax credit, which we will talk about in another video, also caused a ton of problems.
Lisa Greene-Lewis: Yeah, it’s something that’s common right now. The IRS did update its refund FAQs. And they put a notification at the top. And it says that if you’re seeing an adjustment in your refund, it could be because of the advanced child tax credit payment or the third stimulus.
Tracy Byrnes: And there are also other obvious reasons that your refund is different, right? You tried to take a credit you didn’t deserve. You left out some income that was already reported to the IRS. But there are also bigger things, like back child support and overdue taxes. How does that all play in?
Lisa Greene-Lewis: Right. So those would be a treasury offset. So if you had back child support or you owed a state tax liability, they would offset your federal refund with those amounts. And you would get a letter regarding the treasury offset, as well as any of these other adjustments. You’ll get an adjustment letter from the IRS.
Tracy Byrnes: And I’m sure people know they could check the IRS’s “Where’s My Refund?” site. But also, you could use TurboTax, too, to help out, right?
Lisa Greene-Lewis: Right. TurboTax, we guide you through the advanced child tax credit, as well as the third stimulus. And we identify and have you look out for that letter. We specifically call out the IRS Letter 6419 and Letter 6475 so that you don’t miss inputting the numbers from those letters.
Tracy Byrnes: Right, because the fewer mistakes, the better, the quicker you get your money back.
Lisa Greene-Lewis, thank you so much for taking the time.
Lisa Greene-Lewis: Thank you for having me.
Editor’s note: Video produced by TheStreet’s Zach Faulds