by Deborah Ritz, Independent Tax Preparer
QUESTION: Is Direct Deposit a Safe Way to Get a Tax Refund? How safe is the direct deposit feature for having tax refunds issued directly to a checking or savings account?
What happens if there’s a mistake in the bank account number or routing number?
What can be done if there’s a mistake with the direct deposit information?
The IRS and New York State prefer to issue refunds via direct deposit.
This is faster and generally speaking, direct deposit is a relatively safe way to receive your tax refund.
That’s because there’s no check to get lost in the mail and the IRS can send out refunds faster than by mailing a check. But taxpayers should exercise extreme diligence with their direct deposit information.Taxpayers who have put incorrect bank account numbers in the direct deposit field have encountered enormous difficulties in retrieving their tax refund, sometimes resulting in losing the refunds forever.
If the money is deposited into the wrong account, neither the IRS or the state tax department will help with retrieving it or be responsible for the error.
Be sure to keep a copy of your tax return with the information on it.
If an error is made the routing number is the only way to find out what bank the funds were deposited into.
Once the bank is determined a conversation with customer service usually takes care of the problem but there are no guarantees, it is best to avoid the error in the first place.
By comparison, if a refund check is mailed to a wrong address or someone other than you cashes a check the taxing authority has legal and administrative options for retrieving the misappropriated refund money.
Those same protections are completely lacking with direct deposit refunds.
Once you have filed your return wait about 2 weeks if you haven’t received your refund you can check http://www.irs.gov/individuals/article/0,,id=96596,00.html for the federal refund and https://www8.tax.ny.gov/PRIS/pris
Questions for Deborah Ritz can be e-mailed to The Weekly Adirondack at WeeklyADK@yahoo.com
