9 Things You Need to Know About Tax Refunds

Receiving a tax refund can feel like a breath of fresh air. It often arrives when you need to pay off holiday debt, plan a major purchase, or cover bills. 

But how long does it take to receive your refund? Can you check your filing status? And what else do you need to know about tax refunds? 

1. Tax refunds typically arrive within 21 days 

According to the Internal Revenue Service, most taxpayers who e-file and select direct deposit as their payment method receive their refund within 21 days. 

Taxpayers who file paper returns and request refunds through the mail have their data entered manually into the IRS system. This time-consuming process means anyone choosing paper returns or mailed refund checks should anticipate a wait of about six to eight weeks. 

2. Delays happen 

There are many reasons your tax refund may get delayed. If you filed an incomplete tax return or if your return contains errors, you won’t receive your refund until after the issues are corrected. To get your tax refund quickly, double- and triple-check each line before you submit your return. If you want to check your refund status, visit IRS.gov or download the IRS2GO app. 

3. Tax refunds ≠ tax returns 

Your tax refund is not the same thing as your tax return. 

Tax returns are those forms we’re all scurrying to file with the IRS before the annual deadline (aka “Tax Day”). Your tax return is paperwork that shows the government how much you’ve earned over the previous year, where you earned that income, and how much of it you withheld for taxes. 

Your refund is the money you overpaid on last year’s taxes. The IRS examines your tax return and, if your withheld amount exceeds what you owed, issues a refund for the difference. 

4. Tax refunds are not ‘free money’ 

The average refund amount in 2024 was just over $3,100 — nearly triple the median weekly wage. Getting that kind of payout all at once can feel like hitting the jackpot, which may be why 26% of taxpayers end up blowing their refunds on unnecessary splurges. 

But that money was yours to begin with — you’ve merely loaned it to the government interest-free. 

Rather than overpaying your taxes just to receive a larger refund, consider lowering your withholding and investing that money into an interest-bearing savings account, a certificate of deposit, or a credit-builder account. This way, your money works for you rather than Uncle Sam. 

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5. You can save your refund 

According to Lincoln Financial, most households in 2024 were using their tax refunds to build up emergency savings or pay down debt. A significantly smaller portion of respondents planned to put the money toward a vacation, car repair, or medical procedure. 

The takeaway here? While you’re free to spend your tax refund however you’d like, you could put it to good use to help you reach those financial goals faster. 

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6. E-filing speeds things up 

Electronic filing, or e-filing, is the process of submitting your tax return online through tax preparation software. Not only is this the fastest and safest way to submit your return, but it can also help you get your refund a little faster. 

Popular e-filing platforms include TurboTax, H&R Block, TaxAct, and FreeTaxUSA. Live tax support is available if you need a pro’s guidance. 

7. You may receive less than expected 

There are many reasons why you might receive a smaller tax refund, including: 

• Calculation errors 
• Underpaying estimated taxes 
• Unpaid tax debt 
• Past-due child support payments 
• Delinquent student loans 
• IRS adjustments 

If the IRS does adjust your expected refund amount, you’ll receive a CP12 notice outlining the changes. 

8. You might receive 2 refunds 

Many taxpayers receive two separate tax refunds: one for federal and one for state taxes. Federal refunds are issued by the IRS, while state refunds come from your state tax department. To ensure a speedy refund, choose direct deposit as your preferred payment method for both. 

9. You could increase next year’s refund 

There are certain things you can do in 2025 to increase the amount of money you get back next year. Donating to charity, contributing more money to your retirement accounts, spending your Flexible Spending Account (FSA), and deferring any work bonuses to January could increase your potential refund. 

Make the most of your tax refund 

Tax refunds can provide a significant financial boost — but understanding how they work and how to maximize them is essential for making the most of your money. Whether you choose to pay off debt, build an emergency fund, or save for future expenses, having a plan in place could set you up for financial success in 2025.