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Still missing your tax refund? You’ll soon receive 5% interest


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There’s good news for those who are still waiting on a refund. The rate increases to 5%, up from 4% as of July 1. According to the agency. latest quarterly adjustment

The IRS typically has 45 days from the deadline for filing returns to process them and issue refunds. Tommy Lucas, who is a certified financial planner, and an enrolled agent at Moisand Fitzgerald Tamayo, Orlando, Florida, said that the IRS adds daily compounding interest to their returns.

Current interest rates at IRS are below the federal short term rate. 8.3% annual inflation. However, it is still considerably higher than the average savings account.

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This sounds great, but it comes with a drawback: Your interest will be taxable.

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In the fiscal year 2021 the IRS interest payments reached $3.3 billion, with an increase of 33% from 2020 for individual returns. The U.S. Government Accountability Office reported that the IRS interest payments rose to $3.3 Billion. reported.

Checking delayed refunds

It is easiest to verify the status of your refund by using the “Where’s My Refund?”Use the online tool IRS2Go app. You will see three steps in the portal: Return receipt approval, Refund Approval and If the refund was sent with an estimated Deposit Date.

Recent updates by the IRS to the portal include 2020 and 2019 returns were made public, according to Phyllis Jo Kubey (a New York State Society of Enrolled Agents president)

She stated that “Before the upgrade, the online inquiry for refunds only covered current year refunds. This meant anyone wishing to know about an older-year refund must call the IRS.” 

Many taxpayers have struggled to get in touch with IRS agents due to high call volumes. During the first half of 2021, there were fewer than 15,000 employees to handle over 240 million calls — one agent for every 16,000 calls, according to the National Taxpayer Advocate

Kubey stated, “I hope that this marks the start of further enhancements to IRS’ online refund inquiry tools. I look forward for more improvements.”

Backlog of IRS

It has been for a while. difficult period for the IRSThe agency is battling with pandemic-related backlogs.

According to Ken Corbin of the IRS, chief taxpayer experience officer, 2022 saw 8.2 millions paper returns.

His goal was to return the IRS to an earlier state before the pandemic. We must process the paper in order to get back to providing the services that taxpayers are entitled to.

Charles Rettig from the IRS told House Members in March that he expects the backlog to clear by the end of 2022.