Direct deposit sounds like a no-brainer when it comes to getting a tax refund. Who would want to waste time and keep running to the mailbox to keep an eye out for a fat tax refund check?
But it’s not foolproof. Ever think about what happens if you enter the wrong account number? Or if somehow that refund is deposited into someone else’s account?
You might also need Form 8888 for the Allocation of Refund, which is used to split your refund among two or three bank accounts.
Consumers should talk with their banks to make sure the routing number on the check is the same routing number that would be used for direct deposit. In most cases, it is. But some banks use different routing numbers for direct deposit.
Avoiding a direct deposit glitch is far easier than trying to correct a problem afterward.
How much trouble tax filers run into, of course, will depend on each situation.
Some taxpayers have ended up waiting up to three months or so for a tax refund check after running into direct deposit snags.
"Needless to say it’s not a fun endeavor,"
The IRS notes that if you incorrectly enter an account or routing number that belongs to someone else and your financial institution deposits the money into someone else's account, you must work with the bank to recover your money. If you contact the bank and two weeks have passed with no results, file Form 3911 "Tax Statement Regarding Refund."
"However, if funds are not available or the bank refuses to return the funds, the IRS cannot compel the bank to do so," the IRS states online.
"The case may then become a civil matter between you and the financial institution and/or the owner of the account into which the funds were deposited," the IRS warned.
Typically, you can get a tax refund within 21 days. But the IRS has warned online that taxpayers should not count on getting a refund by a certain date to cover major purchases or bills. Various delays can have you waiting longer than expected.
First thing before filing that return:Â Double-check the bank account information involving a direct deposit, so you don't contribute needlessly to any delays.
