E-filing is the most popular way to file personal income tax returns, with more than 80 percent of all returns being sent electronically. If you e-file your return, the Internal Revenue Service is usually quick to process it and send you your refund, if you are eligible. However, sometimes there are delays in processing caused by technical problems on the IRS' end or by common errors taxpayers make in preparing the returns.
Tax Law Changes
Each year, the IRS updates all of its electronic forms to reflect the current year's tax law changes. If these legislative changes are made late in the year, the IRS may have to delay the electronic filing system until it has made all of the changes and tested the new forms. In 2013, for example, the beginning of tax return acceptance was delayed from the originally announced Jan. 22 to Jan. 30. If you are using an online e-filer, you may be able to submit your return earlier and have it queue up for submission on the new start date.
The IRS sets up automatic checks when accepting electronic returns. Although it does not disclose what those benchmarks are, if a deduction is wildly high compared to the majority of other filers, it is likely that the return will get flagged for manual review. This will hold up processing and may even result in phone calls from the IRS to obtain more information and documentation. If your return is truly unusual, it may be better to file through the mail and include the documentation upfront.
The checks and balances system the IRS uses for electronic returns also includes calculation checks. If you have miscalculated your income, deductions or taxes owing, the return will be pulled for manual processing. Using a quality e-file system lessens the risk of errors in calculation, because the program performs all of the calculations automatically and warns you if you have missed something. No program is infallible, however, and if there is a built-in error in the preparation program, it may delay the processing of your return.
Personal Information Errors
The IRS lists one of the most common reasons for return holdups as errors in personal information, including Social Security number mismatches, unexpected name changes or incorrect dependents. Social Security number mismatches can happen by typing in the wrong number. Another common cause is a name change due to marriage that has not yet been reported to the Social Security Administration. If you have unusual changes in personal information from the previous year, consider filing manually along with a letter explaining the changes and a copy of your documentation.
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