If you’re in a hurry to get your refund, the fastest way to move it from IRS coffers to you is to have it deposited directly into your bank account.
Lots of taxpayers have already embraced this method, for the benefits of convenience (no running to the bank) and security (no chance for lost checks). More than 61 million people chose to have their refunds deposited directly to their accounts in 2007.
You also have the option of choosing what the IRS calls a “split refund,” that is, dividing your refund among as many as three accounts at three different U.S. financial institutions. These accounts can be of several sorts: checking, savings, brokerage, and IRAs. Just so you know, TurboTax will guide you in getting a direct deposit and a split refund.
Why does the IRS offer the option of divvying up your refund? To encourage taxpayers to save and invest a portion of the money they get back at tax time.
If you sense a mixed message from our government here (save your refund, but spend that proposed tax rebate), you’re not alone. But then we taxpayers are usually conflicted on this subject as well.
Should you opt for a split refund, the IRS offers some pointers: Verify that your financial institution accepts direct deposits, be sure to enter account and routing numbers accurately, and confirm with the institution that a refund received by a couple who filed jointly can be deposited into the account of only one spouse.
If you’re directing your refund into an IRA, it’s up to you to ensure you meet the April 15 deadline for a 2007 contribution and that your IRA trustee knows whether you intend the funds for the year 2007 or 2008.