Will This Be Separate Checks?
March 10th, 2008 | by rachel |
If you are getting a tax refund, you need to do everything possible to use it wisely. Believe it or not, how you receive the refund may be a key to where and when it will, ultimately, be spent. One of the best ways to keep more of your refund is to “split the check”. It’s not the only option, though. Before you sign, seal and send your completed tax return, investigate all the options available for receiving your refund and pick the method that works best for you.
1. SPLIT REFUND - This option allows taxpayers to split their refund and have money deposited in as many as 3 different checking and/or savings accounts. This method of refund is available for any taxpayer that files a 1040 form via electronic or paper filing. It’s an excellent way to save some money “automatically” by having it deposited straight into a savings account. To do this, taxpayers must complete and file IRS Form 8888 with their tax return.
For more information, click here.
2. DIRECT DEPOSIT - Whether you split your refund or not, direct deposit is the quickest way to receive a refund. It is less expensive than processing paper checks. Additionally, direct deposit funds are available immediately upon deposit instead of having to wait for checks to clear their original financial institutions. According to the IRS, direct deposit refunds for electronically filed returns are usually received 14 days after filing/receipt of the completed return. By contrast, direct deposit refunds for returns filed on paper will take 4-6 weeks to appear in a bank account.
For more information, click here.
3. PAPER CHECK - Receiving your refund via paper check will take longer than any other option. Not only does processing the paper check take longer, the time necessary to cut and mail the check will grow as the tax deadline approaches. Certainly, some taxpayers are more comfortable with paper checks because they are a more traditional vehicle for transferring funds. In the current technology age, paper checks can also be more vulnerable to fraud and theft.
For more information, click here.
4. REFUND TRACKING - Once your return is filed and you know a refund is headed your way, there is a tool to monitor the status of that return. The IRS has provided the “Where’s My Refund” tool for taxpayers to see what stage their refund is in and when they can expect to have it in hand. Technically, it’s not a method of receiving your refund but it is a way to monitor your refund and make sure it is used wisely.
Regardless of which method you choose for receiving your refund, there are a couple of things to keep in mind. First, make sure your returns are completely fully. Also, where electronic filing and direct deposits are concerned, make sure to provide accurate routing and bank account numbers for ALL the financial institutions where your funds will be deposited.