The Benefits of Using Direct Deposit this Tax Season
As tax season looms ever nearer, taxpayers should begin thinking about using direct deposit to receive their refunds, as this option allows funds to be deposited directly into either a checking or savings account. In fact, it is even possible for a refund to be deposited into one, two, or three different accounts. To learn more about filing your own tax return or signing up for direct deposit, please contact an experienced Florida tax return preparation lawyer who can advise you.
What is Direct Deposit?
Direct deposit is an electronic transfer system that is used by the IRS to send taxpayers their refunds. As the fastest and most secure way to receive a refund, using direct deposit has become increasingly popular, with the IRS estimating that as many as eight out of ten taxpayers collect their refunds via direct deposit.
Direct Deposit is considered to be the safest way to collect tax refunds, as it avoids the possibility that a check will be lost, stolen, or returned to the IRS as undeliverable. Using this method also saves taxpayers money, as it only costs ten cents to issue a refund electronically. Furthermore, combining an electronic filing with direct deposit typically yields the fastest refunds. In most cases, taxpayers who go this route will see a refund in their account within three weeks of filing. E-filing also reduces the chance that a taxpayer will make an error or forget to include certain information on his or her return.
Easy to Use
Choosing direct deposit as a refund method is a simple process, as it only requires taxpayers to check a box selecting direct deposit and then provide information about the account and routing number where any refunds should be sent. It is important to note, however, that taxpayers should only deposit refunds directly into accounts that are in their own names, the name of a spouse, or both parties’ names if the account is shared.
One of the most important benefits to using direct deposit is that it allows taxpayers to split their refunds into as many as three financial accounts, including bank accounts or Individual Retirement Accounts. A portion of a tax refund can even be used to buy up to $5,000 in U.S. savings bonds. Those who choose to split up their refunds must complete IRS Form 8888 if they are submitting a paper return. Otherwise, a tax preparer’s software will include an option for splitting refunds. However, no more than three electronic tax refunds can be deposited into a single account or prepaid debit card, so taxpayers who exceed this limit can expect a notice from the IRS and a paper refund.
Schedule a Consultation with an Experienced Orlando Tax Return Preparation Attorney
To speak with a dedicated tax attorney about the best way to file taxes or collect a refund, please contact Ronald Cutler, P.A. at 386-490-9949 today. A member of our legal team is standing by to give your case the one-on-one personalized attention that it deserves.