Income tax filing season begins January 29, 2018, and many consumers are set to receive a refund. The IRS recommends filers choose a direct deposit of any refund due, as this is the safest, fastest, and easiest way to get it.
Ways to Receive Your Tax Refund
You can choose to receive your tax refund in one of three ways:
- Direct deposit – The IRS will electronically transfer your refund to your bank account(s). The agency says 80 percent of taxpayers choose this option.
- Mailed check – You can have a paper check sent to the address of your choosing.
- Savings Bonds – Taxpayers can also choose to buy up to $5,000 in US Series Savings Bonds with their refund.
The IRS says approximately 90 percent of taxpayers receive their refunds in less than 21 days from the day their return is accepted. However, you can typically expect it in a much shorter period of time if you elect for a direct deposit – the option the IRS recommends.
4 Reasons to Use Direct Deposit for Your Tax Refund
The IRS gives four main reasons you should choose direct deposit for your tax refund:
- Fast: Direct deposit is the quickest way to get your refund, especially if you choose to electronically file your return. Your refund is put directly into the account you choose when it's ready, whereas paper checks take longer to process, go through the postal system, and clear your financial institution. Consumers who file a paper return can still opt for direct deposit, but note that it takes longer for the agency to process paper returns.
- Easy: Choose direct deposit by following the instructions in your tax software while electronically filing or on the paper return. All you need to do is enter your correct bank account and routing numbers on your return. It's best to double and triple check this information before filing.
- Secure: You don't have to worry about your paper check being lost in the mail, misplaced, or stolen with direct deposit. The IRS notes that the electronic transfer system they use for refunds handles over 97 percent of all Social Security and Veterans Affairs benefits.
- Flexible: You can choose to split up your refund to be deposited in up to three different financial accounts, from different institutions. You can divvy up the funds however you want, and splitting your refund won't cause you to receive it later. Taxpayers looking to divide their refund between accounts will need to use IRS Form 8888 – the Allocation of Refund form.
The IRS won't accept tax returns before January 29, but many filing softwares and tax professionals accept them beforehand. They'll just wait to submit them until the agency's systems open on January 29. If you owe the government money, the last day to file your taxes this year, without getting charged interest and penalties, is April 17.
Making a Difference with Your Refund
Who doesn't get excited at the thought of receiving their tax refund? Eager taxpayers should opt for direct deposit if they're looking for the fastest, easiest, and most secure way to get their money.
You might have big plans for your refund once you have your hands on it. If you have bad credit and need a car, consider using it (or part of it) as a down payment for an auto loan. A car loan can help you get the vehicle you need while giving you a chance to improve your credit through on-time payments.
Auto Credit Express helps consumers dealing with credit issues find auto financing. We work with a nationwide network of special finance car dealerships, and we can connect you with one in your area. Get started by completing our free and secure auto loan request form online.