As the tax deadline fast approaches, direct deposit is a safe, fast and secure option to get your tax refund. This is a representational image. Kelly Sikkema/Unsplash

Following an arduous year of tax payments and keeping up with different IRS requirements, as the deadline to submit your taxes approaches, you may soon be entitled to receive some tax refund payment.

If this is your case, ensuring a smooth and efficient process for receiving your refund is paramount, which is why you should be aware of the different options that may be available to you.

One of those options may be direct deposit, which offers a convenient solution, allowing you to receive your funds quickly and securely without the hassle of waiting for a check in the mail.

But how do you sign up for it? Here's a comprehensive guide on what you should know about setting up direct deposit tax refund as the April 15 deadline to submit your taxes approaches.

How do tax refund payments work

If you paid more through the year than you owe in tax, the IRS may get you a tax refund payment. Actually, even if you didn't pay tax, you may still get a refund if you qualify for a refundable credit.

The amount of time it takes for a tax refund payment to be processed varies depending on how you requested it. For an e-filed return, it can take up to 21 days; for amended returns and returns by mail it may take 4 weeks or more; if your return needs corrections or extra review it may take longer.

For more information on refunds and how to pay your taxes on time, click here.

What is direct deposit tax refund?

The IRS uses direct deposit to electronically issue tax refund payments directly into taxpayers' financial accounts. It is also the fastest and most efficient way to go about your tax refund process, according to the IRS.

What are the benefits of deposit tax refund?

Using direct deposit tax refund is completely free. It also eliminates any chance of your refund check getting lost, stolen or destroyed, and there's no possibility of forgetting to cash it since your refund goes straight into your bank account.

Of course, as mentioned above, it is also the fastest way to get your tax refund payment since it's electronic and doesn't have to travel through the mail. In fact, direct deposit is used across different sectors of the government. For instance, not only do eight out of ten taxpayers get their refunds by using direct deposit, but this is also the same electronic transfer system used to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts, according to the IRS.

Setting up your direct deposit tax refund

To sign up for a direct deposit tax refund, just select it as your refund method through your tax software and type in the account and routing number. Or, tell your tax preparer you want direct deposit.

Every year you file your tax return, you must enter your direct deposit information to get your refund electronically.

Common questions about direct deposit tax refund

As the tax refund process is underway, here are some frequently asked questions you may want to be aware of.

How to request it if you are using a paper form?

If you file your taxes by paper, you can still opt for direct deposit. Simply tell your tax preparer this is your preferred method and be prepared to give them your bank account information.

What to do if you do not have a check to find your account and routing numbers?

A routing number identifies the location of the bank's branch where you opened your account and most banks list their routing numbers on their websites. Your account number can usually be located by signing into your online banking account or by calling your bank branch.

If you have a prepaid debit card, you may be able to have your refund deposited to the card. Many reloadable prepaid cards have account and routing numbers that you can provide to the IRS. Check with the financial institution to ensure your card can be used and to obtain the routing number and account number, which may be different from the card number.

How to receive your refund through mobile apps and prepaid debit cards

Some mobile apps and prepaid debit cards allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Taxpayers should check with the mobile app provider or financial institution to confirm which numbers to use.

How to have your refund deposited in up to 3 accounts

If you want your refund deposited to two or three accounts, or you want to but Savings Bonds with part of your return and deposit the remainder to two or three accounts, use Form 8888, Allocation of Refund.

You can direct your refund to any of your checking or savings accounts, reloadable prepaid debit cards or mobile apps, but you cannot direct your refund to someone else's account, except for your spouse's account, if it's a joint refund.

What to do if you do not have a bank account

If you do not have a bank account, visit the FDIC website or the National Credit Union Administration using their Credit Union Locator Tool for information on where to find a bank or credit union that can open an account online and how to choose the right account for you.

The Bottom Line

As you prepare to potentially get your tax refund this season, it is imperative to know what options are available to get your money back.

Considering direct deposit may be a good idea, since it's faster, secure and more reliable than the other options the IRS provides for you. Of course, you can also talk to your tax preparer on your specific case to see what refund payment option may be best for you. For more information, visit the IRS website.

© 2024 Latin Times. All rights reserved. Do not reproduce without permission.