Your Tax Return – How the Tax Return Process Works

So its nearing April 15th. That dreadful of all days. The Tax Deadline. You know you have a ton on your mind. This is the last thing you want. Well, you are a brave soul You have done this in the past. Many times in the past actually.

So, with a mighty resolution, you decide to get started on your Tax Return this very weekend. You pack your spouse off to a picnic and roll up your sleeves and get ready. You are not afraid of paper, not a bit. You run off to the post office and get all the latest forms and worksheets and sit down at your desk.

So painted below in words is a hypothetical scenario of what would transpire as you head down the glorious path of preparing your Tax Return.

Scenario 1 : HAND-FILLED, SELF-FILED TAX RETURN

1. You go to the post office and pick up the paper booklet with the tax form.
   Now if you are smart you would have gotten every tax form you know – but you did’nt, so you had to make 2 trips to get all the forms you need.
2. Next… You have to go through the meticulous process of having to fill one box at a time, make sure your entries are okay, make sure you at least copied down everything from your W2 into your . Because each calculation is connected to the next, each box ties to the next. At the end of this painstaking process you arrive at the final number – your refund or the tax you owe.
3. Next step – Find the right address to mail to. Do you know where to mail your tax return. Well its there, its probably in the instructions to the form. Again scan every word until you get the address. Oh Well Eureka!! You just found it.. congratulations. Now put that in an envelope.
4. Walk to the post-office make it before midnight on April 15th and make sure you catch the last snail mail train. Because if it leaves, you are in trouble.. BIG trouble!

Well you made it. You rub your hands with joy and pat yourself on the back. Your Tax RETURN IS FINALLY DONE !! Well you just hit the starter to the engine. You just set in motion for the next series of events that will ultimately get you that coveted refund check!

5. Assuming no postal delays – your tax return will get to the IRS in about 2 business days.
6. Next your little piece of work, your tax return, will enter a queue until its routed to the correct department. lets give his a day for making this arduous journey.
7. Next, It gets picked up to be scanned using sophisticated machines called optical scanners which converts your handwritten tax return into a readable computer file.
8. Hiccup 1: If you hand filled your return with pen and paper, if the scanner cannot recognize your handwriting – then the scanning process will reject – and then it would get put into another queue to be manually processed by a human – lets give 4 to 5 days for this to happen.
9. Someone will actually read your tax return and then type the contents manually into a computer. At this point your tax return is now a what is called a raw data file.
10. Now the raw data file will get run through an editing program which will verify the basic details – like did you put in a valid SSN, did you punch in too many zeros in your income eg. you wrote $50000 instead of $5000 in a box on the form.
11. If everything is okay, Your return which is now computer file will then get put into a database along with millions of other tax payers. Your tax return will join thousands of others who e-filed their tax return at this point.

From this point on – the process should work like greased lightning.

12. Next a series of computer programs will be run on the database to validate the tax returns.
    It will compare the data on your file against what your employers filed. So if you incorrectly entered $15200 on your income but the employer sent in $20,000 the process will pull out your tax return for ‘special’ processing.
13. Also your tax return gets pulled up in a random audit checks. The most brilliant minds in the IRS ought to be designing these computer programs to determine which tax return needs to be pulled up for auditing. Perhaps the holy grail of IRS secrets !
14. If you pass step 9, and you have a refund, you will be routed to a program that prints
    your refund check – give another 1-2 days for this process to complete.
15. If you elected direct deposit, a pay request will be sent to deposit the money into your bank account (1 day)
16. If you did not elect direct deposit, your refund check will go for printing (1 day). Then your refund will go to the mailing department to be sent to you (1-2days). After about (2-3 days) of spending time in the USPS, the check should get to you – again via snail mail, the same way you mailed out your tax return.

This was just one tax filing scenario – the one with a happy ending! Did you glean any information from this ? Did you learn how you can do this process more efficiently, or how you can cut your tax preparation costs. Find out more about the tax filing process and the tools and tax preparation tips that will surely save you a lot of grief and save you money!