Taxpayers have options and flexibility for choosing how to receive their federal income tax refunds. There is the ‘old-fashioned’ way – a paper check. And there’s direct deposit into a bank account. The big advantage of direct deposit is that refunds arrive much faster.
There is also the option of splitting the refund among two or three checking or savings accounts with U.S. financial institutions regardless of which 1040 form they file. This option became available in recent years after a study showed that one in three taxpayers if offered the choice, opted to direct part of their refunds to savings accounts.
Split refunds also may help some taxpayers reduce their reliance on refund anticipation checks and keep more of their tax refund. Regardless of how the tax form is filed, whether electronic or paper, direct deposit gets refunds back faster to the tax payer than a paper check.
If one is having their taxes prepared by a professional it’s a good idea to bring account and routing numbers to the tax preparation appointment and double check the accuracy of the account numbers entered on tax returns. The IRS assumes no responsibility for taxpayer error!
Using direct deposit and splitting a refund into different accounts may help you save and manage your refund dollars better. Learn about it through the IRS website at www.irs.gov or ask your tax preparation professional or the volunteer tax assistance site worker.