Right from the start, let’s clearly differentiate between a tax refund and a tax return. Unlike what many believe, they are not the same.

A tax refund is an amount returned to you on paying more taxes than your tax liability. On the other hand, a tax return is an annually filed form that outlines your income, purchases and other information related to taxes.

Now that you are clear about the specifics and basic, let’s learn more about tax refunds.

Eligibility criteria for tax refunds
If you have paid more than your tax liability, you qualify for a tax refund. Note that this is not “new money”; it is your money. This money can be used for further investments or savings.

Moreover, if you receive large amounts of tax refunds, consider slightly modifying your withholdings on your W-4 form. This slight tweak will prevent you from succumbing to rising rates of interest.

Ways to obtain large tax refunds
The primary and most essential step is to be organized. Save your receipts, expense bills, and any documents that may be necessary for filing taxes or which are pertinent to your financial records. Always ensure that you start the procedure of filing your taxes early, to avoid any undue pressure of deadlines. Filing early will also help avoid mistakes that could hamper your chances of obtaining large tax refunds.

If necessary, seek out an expert tax preparer or an accountant to help you file your taxes. This guarantees that you do not overlook any avenues of potential savings and make no mistake in filing your taxes. However, check the credentials of the hired experts to prevent fraud.

If you think that, the tax refund received is not accurate, do alter your tax returns within three years from the original date of filing.

Where to look in case your tax refund is late?
You receive your tax refund within 21 days, as stated by the IRS. However, in case of a delay, you can track your tax refund on the IRS website or by using the IRS app (IRS2Go) under the “Where’s my refund?” tab. Do keep in mind that the IRS at times will withhold your tax if you have debts that need to be paid. Timely repayment of such debts will ensure speedy tax refunds. Furthermore, using digital mediums for filing your taxes will supplement speedy tax refunds.

Do you actually obtain a tax refund?
This completely depends on your finances. Use an online tax estimator to know your tax liability. This enlightens you about your current financial situation and whether you are going to have a surplus or owe a debt on a decisive day.

How to invest your tax refund?
While spending money is always fun, it is advisable to save for a rainy day. You can use your tax refunds for further investments or clear impending credit card debts. Utilizing money from tax refunds to secure the coming year’s financial responsibilities and goals is highly recommended.