While you can sit and wait for your tax refund check to hit your mailbox, it can be a long, painful, and frustrating wait when you really need that money. The good news is that the IRS will directly deposit your tax refund (some or all of it) electronically into your savings or checking account. You just need to let them know that’s how you prefer to receive it when filing your taxes. In this article, we will review some of the reasons why having your tax refund directed deposited is the best option, as well as the steps on how to set it up.
Reasons to Get Your Tax Refund Direct Deposited
- It’s Faster
The greatest benefit of having your tax refund directly deposited into your savings or checking account is there’s no waiting for the IRS to print and mail a check to you. Instead, your money is electronically sent and deposited into your account. It’s a much quicker option than traditional mail.
- It’s More Secure
Because refunds go directly into your account, there is no risk of your paper check becoming lost or stolen. Direct deposit is more secure and uses the same electronic transfer system that Veterans Affairs and Social Security benefits use for their deposits into millions of accounts. Plus, it’s also trackable.
- It Gives You Options
When you receive your IRS tax refund, you have the option of splitting your refund between up to three accounts. These can be checking accounts, savings accounts, health, education, or even retirement accounts. This allows you to determine the best way to allocate your funds prior to receiving the money, eliminating the temptation to spend it first.
- It’s Easy to Use
Simply choose direct deposit as your method of refund through whatever tax software you use by typing in your savings or checking account number and routing number. If you have a tax professional prepare your taxes, tell them you want the funds direct deposited and provide your account information. Even if you’re one of the few individuals who file their taxes by paper, you can still choose direct deposit. Just be sure you check your entries thoroughly for errors when entering your account information.
How to Get Your Tax Refund Direct Deposited
The steps to have your tax refund direct deposited are simple:
Step 1: Choose direct deposit right from your 1040 tax return if you’re having the money sent to a single account. Be sure you indicate the account and routing number (and triple check they are correct) of your financial institution and the type of account it is (Ex: Savings or Checking) on your Form 1040 (35a, 35b, 35c, etc.). You can include this information on your tax software, or you or your tax preparer can include this on your tax return.
Step 2: You could alternatively use IRS Form 8888 if you’re planning on splitting your refund into three different accounts. Form 8888 enables you to purchase U.S. Savings Bonds with your refund as well, or you can have your money sent to your IRA.
Typically, the IRS processes most tax refunds within 21 days. If you don’t receive your refund after 21 days of submitting it, you can use the “Where’s My Refund?” tool to see your refund status.
We’re Here to Help!
Direct deposit is the ideal option to receive your tax refund. It’s secure, convenient, and helps you manage your finances better. If you have questions on setting up direct deposit for your IRS tax return, feel free to contact us at 888-777-9982 or stop by any of our convenient branch locations.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.