It’s tax season, which means it’s time to file your taxes with the Internal Revenue Service (IRS). Filing taxes can be a daunting prospect for many, especially if it’s your first time. In addition to understanding how to file taxes online, one essential component to tax filing is securing a fast and easy way to receive your money. The most efficient way to receive your tax refund is to set up direct deposit with the IRS when you file.
Why should you set up direct deposit with the IRS?
Eight out of 10 taxpayers use direct deposit to get their tax refunds, according to the IRS. Choosing direct deposit over receiving your money as a check in the mail has many benefits.
You will get your money faster
Whether you file electronically or on paper, direct deposit gives you access to your refund faster than you would if you were to wait for your check to arrive in the mail. You can also expect a quicker refund if you combine direct deposit with electronic filing, rather than printing out and mailing in paper tax returns. In fact, if there are no issues with your tax return, the IRS expects nine out of 10 taxpayers will receive refunds within 21 days of when they file electronically with direct deposit.
Your money is safe and secure
Identity theft and fraud are very real concerns when it comes to receiving money from the government. One good thing about setting up direct deposit with the IRS means you don’t have to worry about mail theft, which could put your check and your personal information at risk.
You can better manage your finances
Direct deposit can also help you manage your finances and save for the future. The IRS lets you split your refund across two or three accounts — sending some of your refund to an account for immediate use and some for future savings. This will better help you invest in the future, if you dedicate a portion of your refund to your checking account and put the other portion into a savings account or a retirement account.
How to get your tax return by direct deposit
Whether you file your taxes electronically or send in a paper tax return, you can elect for direct deposit. The IRS processes most refunds in less than 21 calendar days. You can use the Where’s My Refund? tool to check on the status of your refund.
To set up direct deposit, do the following:
- Select direct deposit as the refund method when using tax software or working with a tax preparer, to file your taxes.
- Type in your bank account and routing numbers.
- Make sure to double-check your entries to avoid errors.
Note: If you’re a Chime member, all you have to do is choose “direct deposit” on your tax return software. You then can input your Chime Checking Account number and corresponding routing number.
A couple of other things to note:
- Taxpayers may have a refund applied to their prepaid debit card. Many reloadable prepaid cards have account and routing numbers that could be provided to the IRS. But check with the financial institution to make sure the card can be used and verify the routing number and account number, which may be different from the card number.
- There are mobile apps that may allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Check with the mobile app provider to confirm what numbers to use.
How to get your stimulus check by direct deposit
In addition to a quicker tax return, direct deposit will also ensure you receive your stimulus check faster. Although congress has already sent out two rounds of stimulus payments, it’s still worth knowing how to set up direct deposit for stimulus checks—in case there are more payments on the horizon. Keep in mind that the process will differ slightly from setting up direct deposit for tax returns.
If you’re normally not required to file taxes because you’re part of the SSI or SSDI programs, you’ve retired or you don’t meet the IRS’ income threshold, you might still want to set up direct deposit in order to obtain stimulus money. If this is the case, you’ll need to file Form 1040 or Form 1040-SR, where you will enter your bank account and routing numbers for direct deposit.
- If you’ve filed taxes in the past and haven’t moved or otherwise needed to change your address or bank information, the direct deposit details you provide in the IRS Direct Pay system when you pay your taxes is all you need. The IRS will get your direct deposit information from there.
- If you are a first-time filer and the IRS doesn’t have your information yet, or you want to change your direct deposit information, then you need to provide it manually at the IRS Get My Payment page. You’ll need to provide your social security number, birthday, street address, and zip code. The IRS will then tell you if you qualify for a stimulus payment, and you’ll be prompted for direct deposit information if they don’t already have it on file.
Tax filing resources
For more information on how to file your taxes and make sure the process is as smooth as possible, check out these other Chime blogs.
10 Basic Tax Terms You Should Know
Tax Prep: Should You Go With a Pro?
How To Get Every Tax Write-Off You Deserve
What To Do if Your Tax Refund Deposit Goes Into the Wrong Bank Account
