I usually need to pay some amount of taxes each year and use tax software and a credit card to pay.

Unusually, I get a refund this year. It seems that the tax software, working w/ a third party, can have the refund directly deposited into my bank account (for a fee?). But I need to provide my bank routing and account info.

Is this safe? Wondering especially about the third party. If generally safe, should I use a junk bank account (an account that I don't use much and can close if necessary)? Or okay to use my normal account? It's safe - millions of people do this....?

Or should I just request the IRS to send me a physical check?

In my experience the third party and a fee is only if you want your refund immediately. If it’s just a direct deposit into your account there should be no fee. Not sure what tax software you are using but might want to check if there is a free option via direct deposit. If not I personally would take a check.

Why does a third party need to be involved for a refund? If you get a refund, you provide the account number and routing number on the 1040 and the IRS does direct deposit to that account. I use TurboTax and that’s how it works for me.

There shouldn't be a fee, or a third party involved in the deposit.

The account info is included on your return, and the IRS send the deposit straight to your bank account.

Mine usually takes about 10 days for the IRS deposit refund to hit, after electronic filing.

I thought I read that when requesting electronic refund using TT, a third party is involved (for whatever reason I don't know).

If you send in a paper copy of the return instead of filing electronically, I'm guessing no third party involvement. (and no fee for processing).

Should I just send in a paper return?

quote:

Originally posted by RogueJSK:
There shouldn't be a fee, or a third party involved in the deposit.

The account info is included on your return, and the IRS send the deposit straight to your bank account.

Mine usually takes about 10 days for the IRS deposit refund to hit, after electronic filing.

So, even w/ electronic filing, the IRS directly deposits the refund into your bank account? No fees and no third party? That's great. No worried then. I guess I read something incorrectly.

Oh I think I got it. Pay the fee w/ your CC upfront then the refund is directly deposited. Otherwise, needs processing w/ a third party.

So, just pay whatever TT fees are due upfront w/ a CC. If this jives w/ what you guys understand, then I think I'm good to go. Thanks!

Payment Option Impact: If you pay your TurboTax fees upfront with a credit/debit card, the refund goes directly from the IRS to your bank. If you choose to pay fees out of your refund, it goes first to an intermediary bank (SBTPG), which may cause a slight delay.

Correct. Pay your state filing fee with a credit card. Then have the refund deposited in your bank account a couple weeks after e-filing.

Don't have the filing cost taken out of your federal refund, which incurs a fee and involves an intermediary.

And don't use TT's "early refund" program, where you pay a fee to effectively get a payday loan for the refund amount a few days early.

Got it. And also don't pay for early refund - just let it come on IRS time. Then no fees and no third parties.

Thanks. Haven't had a refund in a long time. Wasn't sure about this process.

I would submit electronically and have a physical check sent to you. The odds of a criminal intercepting the mail is very low, but there is also the issue of the mailed in return being scanned into or manually entered into the IRS computers. The chance of a problem seems higher than an electronic transmission.

I prefer a physical check because I don't like giving the government permission to access my bank account. Illogical, yes, because they will do whatever the want, but I prefer to get the physical check.

I use TT. IRS deposits the full refund directly to my bank account. No third party, no fee. The only thing I pay for is the use of TT software, which I pay by CC.

And yes, as RogueJSK said, they will tempt you with early refund paid to you by some third party, for which there is a fee. Just avoid that shit.

^^^^^^^^^^^^^^^^
What he said. I've been doing it that way for years, nothing strange has ever happened.

It sounds like you already have a junk bank account. I don't see any downside to using that for the refund.

I agree with what rogue says. I also agree with Joel that if you already have a junk account, no downside to using it. And my reasoning is: if it’s your main account that you’re giving the information, I think it makes it that much easier for the government to take money out. They already do this with Social Security deposits they reverse because the recipient died.

But other than that, I have my refunds directly deposited into my account. The information you’re sending when filing electronically is a lot already including your SSN, birthdates, etc. A bank account number and routing information is only that much incrementally more.

If I overpay (always a small amount, if any), I have it applied it to next year taxes.

quote:

Originally posted by 12131:
I use TT. IRS deposits the full refund directly to my bank account. No third party, no fee. The only thing I pay for is the use of TT software, which I pay by CC.

And yes, as RogueJSK said, they will tempt you with early refund paid to you by some third party, for which there is a fee. Just avoid that shit.

This is absolutely correct. The IRS ETFs it to your bank account. I don't do it for state, as TT uses that 3rd party and charges $25. Cheaper to mail it.

Slight thread drift:
Does anyone use an alternative to TT?
Last year I had a problem with them and would prefer to try something else.

quote:

I don't do it for state, as TT uses that 3rd party and charges $25. Cheaper to mail it.

It cost me $7.20 to mail my state return certified mail vs. the $25 TT charges. The state keeps pushing to file electronic - then get TT not to charge for it! Other states do!

The accounting firm that has done my returns for years has my bank info on file. Refunds and payments both happen electronically. No third-party, no fees..

Just out of curiosity: if one wanted to take money out of a bank account (transfer from one account to another account), does one only need the routing / account number? Or is the transfer first authorized / authenticated somehow before allowing the transfer?

For example, let's say I know someone's routing / account number (say I found someone's check). I assume that I can't just transfer money out of the account. But how is authorization / authentication performed for legit transfers?