Tax season begins tomorrow, January 29, you may file your taxes tomorrow. If you want to get your taxes devolution as quickly as possible, we recommend setting up direct deposit instead of waiting for a paper check by mail.
It will only take you a few extra minutes to add your banking details while filing your taxes. When you do, all money owed to you will go directly to your account within an average of 21 days. Most people use direct deposit as a payment method to receive tax refunds. Some groups, such as Social Security beneficiaries, even required by the US Treasury. use direct deposit.
We’ll explain the benefits of setting up direct deposit with the IRS and how to do it. For more details, here it is Why You May Want to Wait to File Your Taxes.
Direct Deposit Will Get Your Tax Refund Faster
When you file your taxes, you usually have the option of adding a bank account so you can receive your refund via direct deposit. “The best and fastest way to get your tax refund is to deposit it electronically and for free into your financial account.” the IRS says. You can deposit your money into up to three different accounts if you want to split your tax refund.
You can also expect a faster refund if you combine direct deposit with electronic filing, rather than printing and mailing paper tax returns. In fact, the IRS recommends setting up direct deposit to avoid delays in your refund. The average time it takes to recover tax refunds for those who filed electronically with direct deposit is less than 21 days. according to the IRS.
You should also be aware that the IRS asks taxpayers to Avoid filing paper returns, if possible, and instead submit the application electronically. Filing your return the old-fashioned way could cause another delay in processing. Filing your tax return closer to the start of tax season rather than close to the deadline will also allow you to get your tax return faster.
Direct Deposit Saves Government Money and Paper
Each paper refund check issued costs American taxpayers more than $1, but only costs one cent for each direct deposit made. according to the IRS. By December 2023, more 105 million refunds were issuedwith more than 9 million sent by mail.
That means that in 2023, it will cost taxpayers more than $9 million to send paper check refunds and approximately $9.6 million for direct deposit.
Direct deposit allows you to send your tax refund to multiple accounts
If you want to spread your tax refund across multiple accounts, now is the time to do it. When setting up direct deposit for your taxes, you can add up to three different bank accounts, which can be beneficial if you use one as a savings account.
Please note that you cannot add more than three accounts. If you do it, you will receive a notice from the IRS and a paper check.
Set up direct deposit when you file your 2023 taxes
When filing taxes, select Direct deposit as your refund method in your tax software, then enter your bank account and routing numbers (you can still add your bank account information even if you don’t receive a refund). You can find your account and routing number on your bank’s website when you log in, call your bank branch, or locate the numbers on a check or statement. You can also provide this information to your tax preparer if you don’t file your taxes yourself.
The IRS says your refund should only be deposited directly into a U.S. bank or an account affiliated with a U.S. bank, and that it should be in your name, your spouse’s name, or both if it’s a joint account.
What if you don’t have a bank account for direct deposit?
If you don’t have a bank account and still want to set up direct deposit with the IRS, you have options. The first, and most direct, is to open a new bank account.
He GetBanked from the FDIC The site includes a bank locator service and information to help you review and choose a bank. If you prefer a member-owned nonprofit banking option, consider a credit union. Visit CNET best checking account and best savings account functions to obtain additional information about bank accounts.
If you don’t want to open a bank account, you can also receive your tax refund via direct deposit using a prepaid debit card. All cards that accept direct deposit will have account and routing numbers that you can enter on your tax return.