Speedy tax refunds just got less speedy. Looks like this is a casualty of protecting your identity while online. Tax software providers are now requiring account holders to use stricter passwords and log-in requirements meant to reduce the chance that a criminal can access their accounts. More effort will be dedicated to confirming taxpayer identities before refunds are paid out. The IRS will have $290 million in additional funding that it can use to fight identity theft, bolster cyber security and improve customer service. Ironically, the federal government will now have to spend more of the taxpayers’ money in collecting their taxes, policing a process that was originally intended to “streamline” a burdensome paper process.
It seems like the process is now being so carefully vetted that some states have passed legislation that prohibits refunds from being paid out before March 1 unless both the employer and the taxpayer have filed the necessary income forms. So even if you are dutiful enough in collecting all your yearly income data, and completing all your tax reporting forms, and filing them as early as possible, you may still have to wait for your state to follow its mandated timeline. Even at the federal level, tax experts concede that the “old days of fast refunds are gone.”
Unfortunately, for the “early bird” tax filers, whether online or through the mail, this is not such good news. But if you are a procrastinator like so many of us, you will be heartened to hear that you can wait until April 18, instead of April 15, because Emancipation Day, a holiday in D.C. falls on the traditional tax day.