People who owe income taxes may dread Tax Day, but people expecting a refund can’t wait to get their money. That’s why many Americans are now opting to get their tax refunds by direct deposit. With direct deposit, you can receive your refund quicker, avoid the headaches of a lost check, and skip a trip to the bank.
With a little under two weeks to go till Tax Day, some 57 million Americans have already received refunds totaling more than $170 billion by direct deposit, according to the Internal Revenue Service (IRS). The agency says roughly 85 percent of refunds distributed so far this year have been direct deposited.
Are you thinking about requesting that your tax refund be direct deposited? Here are some things to consider.
Get your refund faster
Whether you e-file or file a paper return, you can provide your bank account number and get your refund via direct deposit. By choosing direct deposit, you’ll get your refund at least a week sooner. Why wait on the mailman if you don’t have to?
Don’t lose your check
Speaking of the mailman, refunds issues as paper checks have been known to get lost in the shuffle or stolen. With direct deposit, your refund is deposited directly in your bank account. There is no paper check to lose.
You do need to be very careful about providing the correct account and routing numbers. You’ll also want to check with your bank to make sure that your account is eligible for direct deposits. The IRS will send direct deposits to banks, credit unions, brokerage firms and mutual funds.
Skip a trip to the bank
Many banks now demand to see photo identification before they’ll cash a refund check. For those filing their tax returns solo, this is probably no big deal. But, it’s a bit more of a hassle for those who file jointly. With direct deposit, the funds are deposited into your account so there’s no need to schedule a trip for two to the bank to cash a refund check.
Do you plan to split your refund among different bank accounts? The IRS will do it for you. If you request a split refund, they’ll divide your refund between up to three different accounts. These accounts can even be at different financial institutions.
The IRS does say that your refund should only be deposited into bank accounts bearing your name, your spouse’s name or both if it’s a joint account.
It’s no wonder that more and more Americans are choosing to receive their tax refunds via direct deposit. With its speed, security and convenience, they can have their refunds back well before April 15 — Tax Day — even arrives.
“IRS Reminds Taxpayers about Direct Deposit and Split Refunds” — IRS
“Four Good Reasons to Direct Deposit Your Refund” — IRS