IRS Tax Tip: Safeguard Your Refund, Choose Direct Deposit

Story by C. Zawadi Morris.

Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check.Here are four reasons more than 80 million taxpayers chose direct deposit in 2012:

1.  Security.  Every year the U.S. Postal Service returns thousands of paper checks to the IRS as undeliverable. Direct deposit eliminates the possibility of a lost, stolen or undeliverable refund check.

2.  Convenience.  With direct deposit, the money goes directly into your bank account. You will not have to make a special trip to the bank to deposit the money yourself.

3.  Ease.  It’s easy to choose direct deposit. When you are preparing your tax return, simply follow the instructions on the tax return or in the tax software. Make sure you enter the correct bank account and bank routing transit numbers.

4.  Options.  You can deposit your refund into more than one account. 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. If you are designating part of your refund to pay your tax preparer, you should not use Form 8888. You should only deposit your refund directly into accounts that are in your own name, your spouse’s name or both if it’s a joint account.

Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Check with your bank for their direct deposit requirements.

Check the instructions in your tax form for more information about direct deposit and the split refund option. Helpful tips on both are also available in IRS Publication 17, Your Federal Income Tax. Publication 17 and IRS Form 8888 are available on IRS.gov or by calling the IRS at 1-800-TAX-FORM (1-800-829-3676).