Every year, the IRS announces that millions of dollars in tax refunds are lost, stolen or returned to the IRS as undeliverable. These undeliverable or stolen refund checks can be avoided altogether if taxpayers choose to have their refunds deposited directly into their bank accounts.
Taxpayers who choose direct deposit receive their refunds faster than those who choose a paper check.
Direct deposit also allows taxpayers to easily split their refunds to two or even three different checking and/or savings accounts. In order to do this, you just need to use Form 8888, Allocation of Refund (Including Savings Bond Purchases). Just follow the instructions on the form. (If you want IRS to deposit your refund into just one account, use the direct deposit line on your tax form.)
When you split refunds, you have a convenient option for managing your money because you can send some of your refund to an account for immediate use and some for future savings.
If you have any questions about direct deposit, contact a tax professional.
