Still waiting for your tax refund? You are not alone. While some folks have received their refunds relatively quickly, others have been waiting for weeks. The good news, though, is that the IRS will be paying you interest on your refund.
Normally, the IRS pays interest on refunds that are unprocessed 45 or more days after the tax filing deadline. This year, however, the IRS will be paying interest on refunds that are not paid out as of April 15th, even though the tax filing deadline was extended to July 15th.
Everyone who filed by July 15th and was due a refund will receive interest on the refund calculated from April 15th to the date the refund was issued. The interest rate is 5% per year, compounded daily from April 15th to June 30th and 3% for July 1st to September 30th. Both of these rates are higher than what you would earn on a CD or savings account at your bank.
While most people would prefer to have the money in their bank accounts, you can take some comfort knowing that you will receive a bit of a return on your money. Remember, however, that any interest you receive will be taxable income for your 2020 tax return.
Have more questions on your taxes or do you want to start early preparing for 2020? Please reach out to our professionals at Crystal Financial. We’d love to help!Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.