The Fastest Tax Refund Possible

If you're due a tax refund, it's likely that you'd prefer to get it the fastest way possible. Money Central tells us how:

How you file has the biggest effect on turnaround time. Here's what the IRS advertises for different scenarios:

• Mail your return and opt for a paper check: Allow six weeks.
• Mail your return and sign up for direct deposit: five weeks.
• E-file your return and opt for a paper check: three weeks.
• E-file and opt for direct deposit: as fast as two weeks.

The IRS pushes hard for paperless transactions, and if you opt for this route you'll be part of a steadily growing trend: Last year, for the first time, more than half of all individual returns were filed electronically. A record 68.5 million taxpayers used e-file, and that number is expected to climb this year.

If you've been reading the past week or so, you know that I use a CPA to do my taxes with the reasons being:

• They save me more than what I pay simply because they know more about the tax law than I do.
• It saves me 30-40 hours worth of work. Even if my time was only worth $10 per hour (it's worth a lot more), it would still be worth it.
• My taxes are complicated and have a few legal considerations that need to be followed closely. I feel better having a professional looking over the information. There is a "peace of mind" factor that the author discusses above.
• My income is high enough to justify the cost.

H&R Block.  Do it yourself or have us do it.  It's never been easier.

Comments

[Dus10]

I used H&R Block for years. They always seemed very helpful, but the cost started to go up really high. 2006 is going to be the most complex year for my taxes, as I run the risk of my AGI being over $50,000 for the first time. It has always been relatively easy, and I never itemized. So, last year we used TurboTax Online. I loved it because I didn't have to wait in line, and it was cheaper. I could sit around and do all the things that H&R Block did, like changing my educational costs from expenses that lower my AGI to making them credits.

Fortunately, this May I graduate, and my wife is starting her degree. I think that I will use my expenses to have a lower AGI, and her expenses in the Lifetime Learning Credit, so we get the best of both worlds. That, along with home office deductions that I am starting for 2006, may be what I need to keep my liability at or near zero, and effectively use the Child Tax Credit and Lifetime Learning Credit as long as possible so that I can keep the money flowing.

I have filed e-filed as long as it has been available, and it makes it nice. I did the direct deposit option last year, and I had my refund in ten days.

This years refund is going to bring my modest $600 credit card debt to zero, as well as pay off some medical bills and a table that I had financed. That will bring my only loans to my mortgage, student loans, and my two vehilces (one of which is going to be refinanced to a lower rate with a shorter term and will still have a lower payment).

[Lola]

I've done payroll work for 15 years, and I start getting calls for W-2s in early January, so people can get their income tax refunds. I just don't understand why people use their income tax withholding as a forced savings program, then they stress out that they can't file for their refund on January 1st because I don't have their W-2 ready.

Lower your paycheck withholding, and subsequently increase your take home pay. Use the extra money to pay down a credit card balance, or create interest bearing savings. There is nothing wrong with paying in a few hundred dollars with your tax return, and most financial experts will advise you to pay in.

It's little effort to figure out your annual tax liablity and then go to a paycheck estimator web site to figure out how to complete your W-4 so that you are only paying in what you need to.

Say it with me: "Don't give the govenment an interest free loan."

[mpragnes]

why would anyone ever pay for tax software? here's a link to the free taxcut download:

http://tinyurl.com/cy837

[EMF]

I hear people bragging about how big their refund is.

So do I. I estimate mine for 2006 at about -$110. That's a negative amout, which I'll wait 'til late March to pay. Giving me, not Uncle Sam, the interest on that money in the meantime.

[BJ]

"I just don't understand why people use their income tax withholding as a forced savings program."

Because it's a forced savings. There's no way to get at it for a whole year. (Even CDs can be cashed in for a fee.) Granted it's smarter for people to take the money and invest it, but it's easy to see just how many people actually have the self control to do that.

It does crack me up that they turn around and spend it right away though.

Despite all the benefits that the collection of our income tax brings, it does not take away from the fact that the process for filing income tax can be very demanding, complicated and even costly. The cost of course stems from the fact that because filing an individual or company’ s income tax is quite tedious, the aid of a third party is often contracted.