Are You Expecting a Tax Refund?

For the average person, a tax refund check can end up being equivalent
of two paychecks. This amount of money can serve many purposes for the
typical household: it can pay an extra mortgage payment or two, pay off
a few credit cards, or it can be enough money to take that much-needed
vacation. But before you go packing your bags or making other plans for
your check, you must make sure you’re entitled to a refund and that
nothing is standing in your way from receiving a check this tax season.
Here are regulations that will stop you from receiving a refund this tax
season:
1) You (or your spouse) defaulted on student loans:
Student loans are one of most common reasons that people have their tax
refund checks offset. A default generally occurs after a borrower fails
to make payments for 270 days. Your joint return can also be intercepted
for your spouse’s student loan debt. If only one spouse has a student
loan debt, you can fill out Form 8379: Injured Spouse Allocation, and
request to have only one spouse’s portion of the refund taken, as
opposed to the entire refund.
2) You owe child support:
As with student loans, if a spouse is not legally responsible for child
support, that person may be able to collect his or her portion of the
tax return by filling out an injured spouse allocation (Form 8379).
3) You owe an IRS debt:
If you were audited by the IRS or you have a debt from a prior tax year
for any other reason, the IRS is going to collect the money you owe
prior to issuing any refund. A spouse (or former spouse) may be able to
be relieved of the tax debt, interest, and penalties. With a tax debt,
the spouse would file an innocent spouse relief or separation of liability.
4) Your income went up (or your tax situation changed):
If you made more money this tax year than you did last year, you may no
longer be eligible for certain credits, such as earned income tax credit
(EITC), which is a refundable tax credit that results in large refunds
for millions of taxpayers. An increase in income may also impact other
tax benefits, like the premium tax credit. If you used the premium tax
credit to lower the cost of your health insurance plan and then your
income increased throughout the year, you may end up owing money because
you are not entitled to as much tax credit as you received. Even if your
income didn’t change, your tax situation can change if you adjusted the
amount of tax you paid throughout the year.
5) Someone stole your identity:
Identity thieves will steal information that provides them with some
sort of financial benefit, this may include stealing a Social Security
number and filing a tax return. If you think someone has stolen your
identity, the IRS suggests you contact your local police, file a
complaint with the FTC, place a fraud alert on your credit report,
contact your creditors, and close any fraudulent accounts. Also, submit
IRS Form 14039, “Identity Theft Affidavit.”