Alrite yall, another Tuesday is here which means it is another chance to be informed and not get played this upcoming tax season. You ever “thought” you were getting a certain amount back for your refund only to be rudely surprised that you owed this, this, and that and they took it out your refund money? Yeah…talk about a quick way to ruin your every single bit of your day. Well, to make sure that doesn’t happen again, I am here to tell you about REFUND OFFSETS that will help let you know where you stand with the federal government.
WHAT IS A REFUND OFFSET?
A refund offset is a term used by the IRS, when your refund amount is “offset” by another federal debt you owe- which ultimately reduces your refund amount. This can be caused by the following:
– Past due federal tax
– State income tax
– State unemployment compensation debt
– Child Support
– Spousal Support
– Federal nontax debt (ex: student loans)
If you owe any federal taxes, this will be handled through the IRS, however, any other federal debt owed will be handled by the Bureau of the Fiscal Service (BFS).
To know where you stand (Key Point! The last thing you want is for the IRS to garnish your wages because they will.) Call the automated hotline 1-800-829-1040 that lets you know about any federal or non-federal debts tied to your social security number. Trust, it’s better to be prepared and know now, then to be surprised when you don’t receive a refund at all.
Did you file jointly with your spouse, but due to their debt your money was taken?
If you filed a joint tax return, you may be entitled to part or all the refund offset if your spouse is solely responsible for the debt. To request your part of the tax refund, file IRS Form 8379, Injured Spouse Allocation.
If your tax refund was offset to pay a joint federal tax debt and you believe only your spouse or former spouse should be held responsible for all or part of the balance due, you should request relief from the liability.
•To request relief, file IRS Form 8857, Request for Innocent Spouse Relief. The instructions for Form 8857 have helpful directions.
•The IRS will use the information you provide on IRS Form 8857, and any additional documentation you submit, to determine if you’re eligible for relief.