Waiting for your tax refund requires a lot of patience. The Internal Revenue Service (IRS) usually delivers tax refunds within 21 days of filing your return online. In the case of paper filing, refunds are received after six weeks. However, it is possible to receive the refunds earlier than anticipated. One way to speed up your refund is by filing your returns online. Apart from this, there are several other options to receive your tax refund quickly.
- Choose direct deposit: It is estimated that about 8 in 10 taxpayers choose direct deposit so that they get their tax refunds faster. When you opt for e-filing and direct deposit, you get your refund in about ten days. The sooner you file your returns, the earlier you will get your refund. The refund can be deposited by the IRS in your savings, checking, or retirement account. If you want to track your direct deposit refund, you can go to the “Where’s My Refund?” tool on the IRS website and app.
- Put the direct deposit in multiple accounts: Another way to get your tax refund quickly is by splitting the deposit into multiple accounts. You can have the refund deposited in a maximum of three accounts. These can be checking accounts as well as savings accounts. If you want, you can direct the entire or a part of the refund into your individual retirement account. You always get the option of diving your refund into multiple accounts when you use a tax preparation software while filing returns. Another option is to complete the IRS Form 8888 while filing your paper tax return. In this form, mention each of the accounts where you want your direct deposit. These accounts must be in your name, your spouse’s name, or must be joint accounts. It is not necessary for the accounts to be in the same bank or financial institution. Before choosing to receive your refund in multiple accounts, ensure that the bank accepts direct deposits to the account you have selected. If you want, you can choose to receive a part of the refund through paper check and the remaining through direct deposit using Form 8888.
- Take a tax refund anticipation loan: If you are waiting for your tax refund to pay off a bill or debt, consider taking a tax refund anticipation loan. These are also called rapid refund or instant refund loans. You receive the loan in about two days. Once your tax refund arrives, it goes straight to the loan provider. A few financial service providers such as American Express offers services such as American Express Serve® cards. When you direct your direct deposit to these cards, you can get your refunds earlier. The downside of a tax refund anticipation loan is that there can be exorbitant fees involved.
- Purchase a savings bond: From 2010, IRS has been offering a savings bond purchase option. While filing your tax return, complete Part II of Form 8888 to specify that you want to use all or a part of your tax refund to buy Series I Savings Bonds. With this program, you can only buy bonds of up to $5,000. Also, you have to buy one or more bonds worth $50 each, since bonds of other face values are not available with this program. The best thing about these bonds is that you will earn interest on your tax refund.