Tax Season 2025: How to get your money back fast if you overpay the IRS – A step-by-step guide
The tax season is under way and sometimes taxpayers make mistakes resulting in paying more taxes than they should. If that happens, here’s what to do.
The IRS is busy processing millions of 2024 tax returns already submitted by Americans. Most taxpayers will have until April 15 to file their tax declarations on time or apply for a six-month extension.
The IRS typically issues refunds within 21 days of receiving a tax return, but it can take longer depending on the circumstances. One of these could be that a mistake was made when filing out a tax form. Some of these could lead to a taxpayer paying too much in taxes to the IRS.
Tax season 2025: What to do if you overpay the IRS in your taxes
If you have overpaid the IRS in your taxes, you can claim a refund for the excess amount that you paid. If the IRS detects an error the agency will correct the tax return and send a CP24E notice. You will automatically receive a refund of the credit or you can ask the IRS to use the overpayment as an advance payment towards next year’s taxes accordnig to the agency.
If you disagree with the corrections the IRS applied you will have to contact the agency within 60 days from the date of your notice to request a reversal. Beyond the 60-day period, any changes that the IRS made “to reduce your refund will not be reversed and you’ll lose your right to appeal our decision in the US Tax Court.”
“Instead, you may file a claim for refund to dispute the changes. Generally, you must submit the claim within 3 years from the date you filed the tax return, or within 2 years from the date of your last payment for this tax, whichever is later,” states the IRS.
To claim your refund, you can file an amended tax return using Form 1040-X. The form allows you to correct any errors on your original return and claim any additional deductions, credits, or exemptions that you may have missed.
Claiming certain #IRS credits may result in a refund, even if you’re not otherwise required to file a tax return. Use Free File to prepare and file your taxes electronically and get a refund by direct deposit if you’re due one – all for free. https://t.co/3byJqk9fiF pic.twitter.com/BfR69YifVw
— IRSnews (@IRSnews) March 4, 2024
You can also request a refund by contacting the IRS directly. You can do this by calling their free number at 1-800-829-1040, by visiting a local IRS office in person or contacting them online.
Why might people overpay their taxes?
Many people may not fully understand how the tax system works or how to calculate their tax liability correctly. As a result, they may overestimate their taxes owed and end up overpaying.
Individuals with irregular income, such as freelancers or those who work on commission, may have difficulty accurately predicting their income for the year. As a result, they may overpay their taxes to avoid having to pay a large tax bill at the end of the year.
One in five qualified taxpayers don’t claim the valuable Earned Income Tax Credit. #IRS resources can help you find out if you’re eligible to claim the credit: https://t.co/DtWmvtLD2I pic.twitter.com/h3NhzwiGFE
— IRSnews (@IRSnews) March 3, 2024
Life changes such as getting married, having a child, or buying a home can affect your tax liability. If you do not adjust your tax withholdings accordingly you may end up overpaying.
People may overpay their taxes if they are not aware of all the tax credits and deductions they are eligible for. For example, they may not claim all their eligible deductions or may have not realised they are eligible for certain refundable tax credits.