In an environment where speed and security are critical, ensuring a reliable and hassle-free way to receive your money is crucial.
The most efficient way to receive your tax refund is through electronic direct deposit into your financial account, a program provided by the IRS that makes this process free and easy.
Direct deposit gives you the option to deposit your refund into one, two, or even three accounts, providing flexibility and convenience. Even if you don't have a checking account, alternatives to direct deposit are available. This method is particularly convenient and is now available for returns filed after the due date.
Direct payments in the United States
Eight out of 10 taxpayers choose direct deposit, a system proven to be simple, secure and reliable. The same electronic funds transfer system is used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.
The combination of direct deposit and electronic submission represents the fastest alternative to receive your refund and avoid possible inconveniences such as loss, theft or misplacement. The IRS issues more than 90 percent of refunds in less than 21 days, providing taxpayers with flexible and efficient management of their resources. Those who used direct deposit to file their taxes also saw faster receipt of stimulus payments.
You can track your refund using the Where's My Refund tool.
Using direct deposit is easy and accessible. You can select it as a refund method through the tax software by entering the account number and routing number. Even those who file their tax return on paper can benefit from this method. Be sure to check the information you entered to avoid errors.
Don't have a check to find the bank and account numbers? The routing number identifies the bank branch and most banks provide this information on their websites. You can find out the account number by logging into your online banking account or by contacting your branch.
For prepaid debit card holders, the refund can be deposited directly onto the card. Check with your financial institution for the associated routing number and account number.
Mobile applications are also a useful option. Some apps and prepaid debit cards allow direct deposit as long as they have the required routing numbers and account numbers.
Don't have a bank account in the US?
Visit the FDIC or National Credit Union Administration website for information about banks or credit unions that can open an account online.
In addition to the convenience, direct deposit also saves you money. While a paper check costs taxpayers more than $1, direct deposit costs significantly less, just 10 cents per transaction.
The federal tax refund often represents the most significant check for many people and provides a unique opportunity to start or increase savings. Splitting the refund across two or three additional financial accounts, including your retirement account, or investing in U.S. savings bonds is an option to consider.
Dividing the refund is easy, either through tax software or using IRS Form 8888 if you file a paper tax return. Split repayments give you a convenient way to manage your money efficiently.
It is important to remember that direct deposits can only be made to U.S. banks or accounts affiliated with a U.S. bank in the name of the taxpayer, his or her spouse, or both in the case of joint accounts. Limit three electronic refunds per account or prepaid debit card. Taxpayers who exceed this limit will receive a notice from the IRS and a paper refund.
Whether you file electronically or on paper, direct deposit provides faster access to your refund than a paper check, ensuring efficient management of your financial resources.