Medora LeeUSA TODAY
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There are a lot of ways to receive a tax refund, but the fastest way by far is electronically, the IRS says.
Every year, tax refunds providea windfall for millions of Americans. It's the biggest payday of the year for most people. Typically, 75% of Americans receive refunds each year.
Last year, the average refund totaled $2,753, IRS data showed, though that was down 8.6% from the prior year because many pandemic-related benefits had expired. Some tax pros expect the average to edge higher again this year, due, in part, to inflation.
Though the IRS can mail you a paper check, the faster and safer way is through a free, electronic direct deposit, the tax agency says. Eight out of 10 taxpayers receive their refunds through direct deposit, but the IRS wants to push that number higher.
“There’s no chance of it going uncashed, getting lost, stolen, or destroyed,” the IRS said, noting it’s the same electronic transfer system used to deposit nearly 98% of Social Security and Veterans Affairs benefits into millionsof accounts.
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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,onthe bottom left corner of yourchecks or on your bank’s website. Your account numberis on the bottom right corner of your checks, or you can sign into your online banking account or call your bank branch.
If you’re using a tax preparer:
Tell your pro you want direct deposit.
You can even speed things up more. "Combining direct deposit with electronic filing is the fastest way to receive your refund," the IRS said.
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If you're paper filing:
However, you can still use direct deposit even if you’re filing by paper.Just make sure you mark direct deposit on your return and include your information.
Always double-check your entry to avoid mistakes and delays. If you’ve missed a number on your account or routing number, the IRS may send you a paper check.
What if I don’t have a bank account?
Don’t worry. You have time to open a bank account. You can find one through theFDIC websiteor the National Credit Union Administration using theirCredit Union Locator Tool. You can also ask your preparer if they offer other electronic payment options.
Otherwise, you might be able to deposit your refund onto a reloadable prepaid debit card or mobile app. Many reloadable prepaid cards and mobile apps have routing and account numbers, which may be different from the card number. Check with your financial institution to make sure your card or app can receive the deposit and double-check the routing and account numbers.
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Can I split my refund into different accounts?
Yes. This can be a convenient way to manage your money by sending some of your refund to an account for immediate use and some for future savings.
You can use your tax software to do it electronically or use IRSForm 8888, Allocation of Refund if you file a paper return.
You can split your refund, in any proportion you want, and 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 (up to $5,000 and in $50 increments) ofit to buy I Bonds for yourself or someone else.
Your refundcan only be deposited directly into a U.S. or U.S.-affiliated account in your name, your spouse’s name, or bothif it’s a joint account. No more than three electronic refunds can be deposited into a single financial account or prepaid debit card. Taxpayers who exceed thelimitwill receive an IRS notice and a paper refund.
You can also choose to split your refund between direct deposit and paper check.
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How long does it take to get your tax refund by direct deposit?
Most refunds are issued in less than 21 daysfor taxpayers who filed electronically and chose direct deposit.
Through the IRS "Where's My Refund" tool, you can track when the IRS received your tax return, when it approved a refund, and when it issued the refund. The money should land in your account within five days from the date the IRS approves your refund.
If you mailed a paper return and expect a refund, it could take four weeks or more to process your return, the IRS said.
If you claimed the Earned Income Tax Credit or the Additional Child Tax Credit, the IRS by law can't issue those refunds before mid-February. It said it expects most EITC/Additional CTC-related refunds for early filers to be available in taxpayer bank accounts or on debit cards by Feb. 27, if they chose direct deposit and there are no other issues with the tax return.
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Can I track my refund?
Yes. No matter whether you choose to receive a paper check or direct deposit into a single account or three accounts, you can use the "Where’s My Refund?"feature onthe IRS website or call 800-829-1954.
You can check the status of your 2023 income tax refund 24 hours after e-filing or after four weeks if you filed by paper. 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 refund, "Where’s My Refund?" will include a message confirming that your refund was split butwon’t specify the amount deposited into each account. It’ll tell you the estimated date of the deposits and, if the IRS adjusted the amount of your refund for math errors or other reasons, it’ll tell you the amount of the adjustment.
If you buy I Bonds with all or part of your refund and "Where's My Refund?" confirms the IRS processed your refund and placed the order for your bonds, you can contact the Treasury Retail Securities site at844-284-2676to inquire about the status of your bonds.
Medora Lee is a money, marketsand personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.comand subscribe to our freeDaily Money newsletterfor personal finance tips and business news every Monday through Friday morning.
