Direct deposit is best way to receive tax refunds, IRS says
Federal income tax refunds are often the largest single check that some people receive, with last year’s average refund around $3,200, according to the IRS.
The safest and quickest way to receive this tax season’s refund is through direct deposit.
With direct deposit, the IRS says your refund won’t be lost or stolen. And you’ll usually receive the money in less than 21 days, which is a shorter time than the month or more that you typically must wait when your tax refund check is sent in the mail.
Direct deposit is also cheaper. Every paper tax refund check issued by the federal government costs taxpayers more than a dollar, while each direct deposit only costs a dime.
Plus, setting up direct deposit is simple. Whether you’re filing your federal income tax return on paper or electronically, there will be an option to select direct deposit as your refund method. Or you can tell your tax preparer that you want to use direct deposit.
Either way, you’ll need to know your bank account number and your routing number, which can be found through your online banking account, at the bottom of a check or by contacting your bank.
You can also have your direct deposit split between two or three financial accounts, including your IRA. That refund deposit split can be done electronically, or if you are filing a paper return, you can use IRS Form 8888 to allocate your refund.
Keep in mind that you can only have your refund directly deposited into a U.S. bank, and in an account that is in your name, or in your and your spouse’s names if you have a joint account.
How long it takes to get your tax refund depends both on how you file and how you’ll receive your payment.
Those who file electronically and opt to receive payment by direct deposit can usually expect to receive their refund within 21 days. If you choose to file by paper, you’ll likely have to wait at least four weeks before funds hit your account and even longer if you want to receive a check in the mail.
Delays can occur, though. For example, if there are any errors on your taxes, you will have to wait longer to receive your refund while these errors are amended. Also, last tax season, many Americans waited longer than usual for their refunds because the IRS had a backlog of 10.2 million unprocessed returns, mostly paper-filed.
To track your refund, the IRS offers a “Where’s My Refund?” feature at www.irs.gov. Alternatively, you can call 800-829-1954 to find out the status of your refund. Taxpayers can track refunds after 24 hours of filing electronically or after six months or more if filing a return by mail.