Best way to receive your 2023 tax refund? IRS says direct deposit. Here’s how to do it: With the largest single payday approaching, Americans can save themselves some grief by opening an account that can receive electronic payments, the IRS says.
Every year, tax refunds provide a windfall for millions of Americans. Last year, the average refund reached nearly $3,200, although the IRS has said that amount may be smaller this year because many pandemic-related benefits expired. Typically, 75% of Americans receive refunds annually.
Though the IRS can mail you a paper check, the fastest and safest way is through a free, electronic direct deposit, it says. Eight out of ten taxpayers already receive their refunds through direct deposit, but the IRS aims to get even more Americans to move this way.
You can choose to have your refund deposited directly into your bank account or, if you have a checking or savings account set up with the IRS, you can have it deposited into that account. You can also have your refund put onto a prepaid debit card.
The IRS says the fastest way to get your refund is by e-file and direct deposit. The agency expects to issue more than nine out of 10 refunds within 21 days of receiving an e-filed return. Paper returns will take longer.
“Refunds are typically issued within 21 days after the tax return is accepted by the IRS,” the agency said.
You can check the status of your refund on the “Where’s My Refund?” tool on the IRS website.If you’re expecting a refund, the IRS urges taxpayers to use direct deposit. To sign up for a direct deposit, taxpayers can visit IRS.gov and click on the ” Direct Deposit ” link on the home page. The IRS also reminds taxpayers that they should have received a Form 1099-G, which is used to report certain government payments, including unemployment compensation, state income tax refunds, and taxable social security and railroad retirement benefits. If taxpayers have not received their Form 1099-G, they should contact the issuer.
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The IRS noted that it is the same electronic transfer method used to deposit over 98% of all Social Security and Veterans Affairs payouts into millions of accounts, saying “There’s no risk of it going uncashed, becoming lost, stolen, or destroyed.”
How does direct deposit work?
If you’re using tax software to complete your return, select direct deposit as your refund method and type in the account number and routing number of your bank account.
You can find the routing number, which identifies the location of the bank’s branch, on the bottom left corner of your checks or on your bank’s website. Your account number is on the bottom right corner of your checks, or you can sign into your online banking account or call your bank branch.
The best way to ensure a speedy refund is to use tax software to complete your return and select direct deposit as your refund method. Be sure to type in the account number and routing number of your bank account to ensure your refund goes directly into your account.
Best way to receive your 2023 tax refund
If you file on paper, you can still use direct deposit. Just be sure to indicate direct deposit and to include your information on your return. Verify your entry at least twice to prevent errors and delays. The IRS may issue you a physical check if you forgot a number on your account or your routing number.
What if I don’t have a bank account?
Not to worry. It is still possible to open a bank account. You can use the Credit Union Locator Tool on the National Credit Union Administration’s website or the FDIC website to locate one. You might also inquire with your preparer whether they have any other electronic payment choices.
If not, you might be able to deposit your refund onto a mobile app or reloadable prepaid debit card. Routing and account numbers are commonly found on reloadable prepaid cards and mobile applications; these numbers may not match the card number. Verify the routing and account numbers with your bank institution and make sure your card or app can accept the deposit.
Can I split my refund into different accounts?
Splitting your refund is a great way to manage your money. You can send some of it to an account for immediate use and some for future savings. You can do this electronically using your tax software, or you can use IRS Form 8888, Allocation of Refund. You can direct deposit funds in up to three different accounts with U.S. financial institutions, reloadable prepaid debit cards or mobile apps. You can also use part or all of your refund to buy U.S. savings bonds.
If the account is a joint one, your refund can only be placed immediately into a U.S. or U.S.-affiliated account that is in your name, your spouse’s name, or both of your names. A single financial account or pre-paid debit card may not receive more than three electronic refunds. Taxpayers who go over the limit will get a paper refund and a warning from the IRS.
How long does it take to get your tax refund by direct deposit?
The majority of refunds are given to taxpayers who filed online and selected direct deposit in fewer than 21 days.
You may monitor when the IRS received your tax return, when it approved a refund, and when it sent the refund using the “Where’s My Refund” service. Within five days of the IRS’s approval of your refund, the money should be in your account.
Can I track my refund?
No matter how you choose to receive your refund, you can use the “Where’s My Refund?” feature on the IRS website or call 800-829-1954 to check the status. Information is updated once a day, overnight. You’ll need your Social Security or taxpayer ID number, filing status and exact refund amount on your return.
If you split your return, “Where’s My Refund?” will have a notice letting you know that it was split, but it won’t say how much was put into each account. You’ll be informed of the anticipated date of the deposits as well as the amount of any adjustments made by the IRS due to mathematical mistakes or other issues.
You can call the Treasury Retail Securities site at 844-284-2676 to find out the status of your bonds if you purchase I Bonds with all or a portion of your refund and “Where’s My Refund?” later confirms the IRS processed your refund and placed the order for your bonds.
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