Tax season is a time of year that many people approach with a mix of anticipation and anxiety. For some, it’s an opportunity to receive a financial boost in the form of a tax refund, which can be used to pay off bills, cover unexpected expenses, or simply provide some muchneeded breathing room. However, the process of filing taxes and receiving a refund isn’t always straightforward. Delays, confusing tax return transcript codes, and everchanging IRS updates can make the process feel like navigating a maze. In this guide, we’ll dive deep into the latest updates on tax refunds, explore the 2025 tax season, and provide you with the information you need to understand the process, avoid delays, and maximize your refund.
The Importance of Tax Refunds:
For many Americans, tax refunds are a significant financial event. According to recent statistics, the majority of taxpayers receive a refund each year, with the average refund amount increasing significantly in 2025. This year, the average refund has jumped by 18.6%, rising from $1,741 in 2024 to $2,065 in 2025. This increase is a welcome change for many, as it provides a larger financial cushion to help cover expenses or save for the future.
However, the process of receiving a refund isn’t always smooth. Delays can occur for a variety of reasons, including errors on your tax return, missing documentation, or additional verification required by the IRS. Understanding the refund process, the timeline, and the potential pitfalls can help you avoid unnecessary stress and ensure that you receive your refund as quickly as possible.
2025 Tax Season: Key Statistics
Let’s start by looking at the latest filing season statistics from the IRS. As of now, the IRS has received 23.6 million tax returns, which is 7.7% fewer than the 25.5 million received at this time in 2024. The number of processed returns is also slightly lower, with 23.5 million returns processed so far, down 7.6% from last year.
Despite the decrease in the number of returns filed and processed, there’s some good news for taxpayers. The average refund amount has increased significantly, rising from $1,741 in 2024 to $2,065 in 2025. This means that while fewer refunds are being issued overall, those who do receive a refund are getting larger payouts on average. In fact, the total number of refunds issued has increased by 7.6%, with 8.05 million refunds sent out so far compared to 7.48 million at this time last year.
When Can You Expect Your Refund?
One of the most common questions taxpayers have is, “When will I get my refund?” The answer depends on several factors, including how you filed your return (electronically or by mail), whether you claimed certain tax credits, and whether your return requires additional verification.
Electronic vs. Paper Filing
If you filed your tax return electronically, the IRS states that most refunds are processed within 21 days. However, if you filed a paper return, you can expect a longer wait time—potentially four weeks or more before processing even begins. This is because paper returns require manual processing, which takes significantly longer than electronic filing.
Refund Schedule for 2025
To help you estimate when you might receive your refund, here’s a general timeline based on when the IRS accepts your return:
If you file electronically and choose direct deposit: Most refunds are issued within 21 days.
If you file a paper return: Processing can take four weeks or longer, and refunds may take an additional 12 weeks to be issued.
If you claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC): Refunds are held for extra verification, and the IRS cannot issue these refunds before midFebruary. Most EITC and ACTC refunds are expected to be sent by March 3rd, provided that the return was filed electronically, direct deposit was selected, and no issues were detected.
Early Refunds
In some cases, refunds may arrive earlier than expected. This happens when banks release funds as soon as they receive notification from the IRS, rather than waiting for the official deposit date. If your refund status says “sent” but hasn’t hit your account yet, check with your bank’s deposit policies to see if they release funds early.
How to Check Your Refund Status
The IRS provides a convenient tool called “Where’s My Refund?” that allows you to check the status of your refund. Here’s how it works:
If you filed electronically: You can check your refund status 48 hours after submission.
If you filed by mail: It may take up to four weeks before any updates appear in the system.
The “Where’s My Refund?” tool provides a personalized refund date once the IRS processes and approves your return. It’s the most accurate and uptodate way to track your refund, so be sure to use it if you’re wondering when your money will arrive.
Potential Refund Delays and What They Mean
While most refunds are issued within 21 days, delays can occur for a variety of reasons. Understanding the common causes of delays and how to address them can help you avoid unnecessary stress and ensure that your refund is processed as quickly as possible.
Tax Transcript Codes
Tax transcript codes are used by the IRS to communicate the status of your return and refund. Two codes that often signal a delay are:
Code 570: This means the IRS has placed a hold on your refund for review. This could be due to a discrepancy in your return, such as mismatched income or credit information.
Code 971: This means the IRS has sent you a notice, which might require additional information or documentation.
If you see these codes on your transcript, don’t panic. In many cases, these are routine checks, and the IRS may simply need to verify wages or credits before releasing your refund. However, if they need more information, they might request additional documents, such as your W2 or 1099 forms. It’s a good idea to have these documents ready in case they’re needed.
Tax Topic 152 vs. Tax Topic 151
When checking your refund status, you may also see references to tax topics. Here’s what they mean:
Tax Topic 152: This is a normal processing code and does not indicate an issue with your refund.
Tax Topic 151: This suggests that the IRS has adjusted your refund and may be reducing it due to errors or discrepancies. If this happens, the IRS will send you a notice explaining the adjustment, and you’ll have the option to appeal if necessary.
CP05 Notice
If you receive a CP05 notice, it means the IRS is reviewing your tax return for accuracy. This process can take up to 60 days, though some cases resolve faster. During this time, the IRS will verify your income, withholdings, credits, and business income. Unfortunately, there’s no way to speed up this process, so patience is key.
12C Letter
A 12C letter is sent by the IRS when they need additional documents to process your return. This letter is often sent to verify reported income, and responding within 20 days is critical to avoid further delays.
Code 571 and 846
If you see your 570 code update to 571, followed by the 846 refund issued code, that’s a great sign. It means the IRS has lifted any holds on your refund, and your money is on its way. However, if your refund is lower than expected, it could be due to tax errors or outstanding debts, such as pastdue child support or unpaid federal loans. The IRS will send you a notice explaining any adjustments.
Identity Verification
In some cases, the IRS may require you to verify your identity before issuing your refund. This can be done online or in person at an IRS office. If you’re asked to verify your identity, be sure to bring a photo ID, Social Security card, and tax documents to make the process smoother.
Code 841
If you see code 841 on your transcript, it means your refund was canceled. In this case, you’ll need to initiate a payment trace with the IRS to get it reissued.
Tips to Avoid Refund Delays
While some delays are unavoidable, there are steps you can take to minimize the risk of your refund being held up:
1. File Electronically: Electronic filing is faster and more accurate than paper filing, reducing the likelihood of errors and delays.
2. Choose Direct Deposit: Direct deposit is the quickest way to receive your refund. If you don’t have a bank account, consider opening one or using a prepaid debit card.
3. DoubleCheck Your Return: Before submitting your return, review it carefully to ensure that all information is accurate and complete.
4. Verify Your Social Security Earnings: If your reported wages don’t match IRS records, your return could get flagged. Setting up an online Social Security account allows you to check your earnings before filing your taxes.
5. Respond Promptly to IRS Requests: If the IRS asks for additional information or documentation, respond as quickly as possible to avoid further delays.
Conclusion
Navigating the tax refund process can be complex, but understanding the key factors that influence your refund can help you avoid delays and ensure that you receive your money as quickly as possible. By filing electronically, choosing direct deposit, and staying informed about the latest IRS updates, you can make the most of the 2025 tax season.
If you encounter any issues or have questions about your refund, don’t hesitate to contact the IRS or consult a tax professional. With the right knowledge and preparation, you can turn tax season into a positive financial experience. Thanks for reading, and don’t forget to stay tuned for more updates and tips on managing your finances!
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