As taxpayers prepare for the January
29 start of filing season, they should consider a direct
deposit of any refunds due. It’s easy, safe, fast — and the best way to get
a refund. That’s why 80 percent of taxpayers choose it every year.
IRS Direct Deposit:
- Is
Fast.
The quickest way for taxpayers to get their refund is to electronically
file their federal tax return and use direct deposit. They can use IRS
Free File to prepare and e-file federal returns for free.
Taxpayers who file a paper return can also use direct deposit.
- Is
Secure.
Since refunds go right into a bank account, there’s no risk of having a
paper check stolen or lost. This is the same electronic transfer system
that deposits nearly 98 percent of all Social Security and Veterans
Affairs benefits into millions of accounts.
- Is
Easy.
Choosing direct deposit is easy. With e-file, just follow the instructions
in the tax software. For paper returns, the tax form instructions serve as
a guide. Make sure to enter the correct bank account and routing number.
- Has
Options.
Taxpayers can split
a refund into several financial accounts. These include checking,
savings, health, education and certain retirement accounts. Use IRS Form
8888, Allocation of Refund (including Savings Bond Purchases), to
deposit a refund in up to three accounts. Do not use this form to
designate part of a refund to pay tax preparers.
Taxpayers should deposit refunds into accounts in their own name, their spouse’s
name or both. Avoid making a deposit into accounts owned by others. Some banks
require both spouses’ names on the account to deposit a tax refund from a joint
return. Taxpayers should check with their bank for direct deposit rules.
There is a limit
of three electronic direct deposit refunds made into a single financial account
or pre-paid debit card. The IRS will send a notice and a refund check in the
mail to taxpayers who exceed the limit.
Additional IRS
Resources:
- Publication
17, Your Federal Income Tax
- Where's
My Refund?
- Frequently
Asked Questions about Splitting Federal Income Tax Refunds
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