Why Direct Deposit Should Be Preferred

More and more taxpayers are using direct deposit to receive their tax refunds. According to the IRS, more than 84 million taxpayers used direct deposit last year as their preferred payment method. Typically, the fastest way to receive your refund is to file your tax return electronically and use direct deposit.

The obvious advantage of using direct deposit is that it is fast and secure. That is because your refund is directly deposited into your bank account. In cases of identity theft, scammers can easily get the refund directed to another postal address.

With direct deposit, taxpayers do not need to worry about going to the bank to deposit the refund. That also reduces the risk of the refund check getting stolen or lost on its way to the taxpayer.

When using direct deposit, taxpayers must make sure that they enter the correct bank account(s) and routing number. You can use more than one bank account to receive your refund. This can be a checking, savings, certain retirement accounts, or health and education accounts. The maximum number of accounts you can use is three. If you use more than three accounts, the IRS sends you a notice and issues a paper refund instead.

If you file a joint return, you can get the tax refund routed directly into your bank account or your spouse’s bank account, or both. Confirm these details with your financial institution, as some banks only allow refund deposits into accounts that are in both you and your spouse’s names.

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