Direct Deposit Safeguards Your Tax Refund

Some taxpayers are lured into expensive instant refund loans because they want their money in a hurry. Filing electronically will speed things up and so will getting your refund as a direct deposit to your bank account.

It's not only the fastest way to get your refund, it's also the safest, according to the Internal Revenue Service (IRS). Here are four good reasons to choose direct deposit:

• Security: Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct deposit eliminates the possibility of your refund check being lost, stolen or returned to the IRS as undeliverable.
• Convenience: The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
• Ease: When you’re preparing your return; simply follow the instructions on your return or in the tax software. Make sure you enter the correct bank account and bank routing numbers.
• Option: You can deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), to divide your refund. A word of caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Additionally, Form 8888 should NOT be used to designate part of your refund to pay your tax preparer.

For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form. Other information about direct deposit is also available in IRS Publication 17.  

When a taxpayer combines e-file and direct deposit, the IRS will likely issue your refund in as few as 10 days.