As the 2022 tax filing season begins, the Internal Revenue Service is asking taxpayers to file tax return electronically and use direct deposit for refunds.
Here’s why that would be a good idea:
- Using a direct deposit is the safest and most convenient way to receive a tax refund.
- Choosing IRS direct deposit is the fastest way for taxpayers to get their refund.
- Getting your refund electronically is secure. Since refunds are electronically deposited, there’s no risk of having a paper check stolen or lost in the mail.
Here’s how to file electronically: Visit IRS.gov for details about IRS Free File, Free File Fillable Forms, free tax return preparation and more. Taxpayers who file a paper return can also choose direct deposit, but it will take longer to process the return and get a refund.
But when filing electronically, be aware that you have options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. To do this use IRS Form 8888, Allocation of Refund, Including Savings Bond Purchases to deposit a refund in up to three accounts. However, this form cannot be used to designate part of a refund to pay accountants or others tax services.
Also, when you file, carefully follow the instructions when selecting direct deposit as a refund method and enter the account information as directed. You must enter the correct account and routing numbers when filing.
Taxpayers should deposit refunds into U.S. bank accounts in their own name, their spouse’s name or both. They should avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.
Veterans can use the Veterans Benefits Banking Program for access to financial services at participating banks. Tax preparers may also offer electronic payment options.
Some mobile apps and prepaid debit cards allow for direct deposit of tax refunds, too. 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.
Taxpayers must have their routing and account numbers for direct deposit available when they are ready to file. The IRS can’t accept this information after a return is filed.
There is a limit of three direct deposit refunds made into a single financial account or prepaid debit card.
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Richard Soo Hoo CPA is a Qualified Tax Expert (QTE) of the Asian American Civic Association Low Income Tax Clinic (AACA LITC). He provides tax, accounting, and international finance services to Chinese companies and individuals in real estate, medical, pharmaceutical, bioTech, software, medical device, investment visas (EB5. E2, L1, H1B), 501c(3) non profits, and tax representation before the IRS. In addition to the Massachusetts CPA, Richard holds a Harvard AB and Stanford MBA.
SAMPAN, published by the nonprofit Asian American Civic Association, is the only bilingual Chinese-English newspaper in New England, acting as a bridge between Asian American community organizations and individuals in the Greater Boston area. It is published biweekly and distributed free-of-charge throughout metro Boston; it is also delivered to as far away as Hawaii.