Rather than spend your tax refund, there are ways you can make the money work for you. Here are some ways to best use your hard-earned refund.
Expecting a tax refund this year?
You have several ways to receive your money. But the Internal Revenue Service says one method trumps all others: Direct deposit.
Find out the benefits of using direct deposit for your tax refund and what information you’ll need to have on hand.
5 benefits of using direct deposit
The IRS says there are many advantages to receiving your refund this way. Here are five:
1. It’s fast.
Direct deposit is the fastest way to get your tax refund, especially when you also file your return electronically.
The IRS said it issues more than nine out of 10 e-filed refunds in less than 21 days.
“With direct deposit, you’ll get your money faster and receive it directly into your account,” said Dupaco’s Jill Gogel, assistant vice president, fraud services.
You can track the status of your refund using the IRS’ Where’s My Refund? tool.
2. It’s free.
You don’t have to pay a fee to receive your funds this way.
Plus, it saves taxpayers money. It costs the IRS more than $1 for every paper refund check issued, compared to 10 cents for each direct deposit made.
3. It’s secure.
With direct deposit, there’s no risk of having a paper check stolen or lost.
“And with our other electronic services to protect your account, you’ll be able to see exactly when your tax refund was received,” Gogel said.
4. It’s flexible.
You can have your refund deposited into up to three financial accounts, including:
- Individual Retirement Account
5. It’s easy.
Just follow the instructions within your tax software or tax form.
What you’ll need to provide
Your refund should only be put into accounts in your name, your spouse’s name or both if it’s a joint account.
On your tax form, you’ll select direct deposit as your refund method. You’ll also need to provide some account information.
If you’re having the money deposited into a Dupaco account, here’s what you’ll need to know:
- Routing number: Dupaco’s routing number is 273974581.
- Account number: You can find your account number within Shine Online or Mobile Banking. From the Account Summary screen, select the account. In Shine Online, your account details are on the right side. In Shine Mobile, tap the green arrow next to your account’s available balance to see the details. (Bonus: You’ll also see the date you opened your account, the account type and, if it’s a dividend-earning account, its rate and how much you’ve earned.)
Don’t receive your tax refund this way
Some tax software companies give you the option to receive your tax refund on a prepaid debit card.
It’s not ideal.
And here’s why: These cards can come with an array of costly hidden fees. You might pay monthly, transactional and card reloading fees.
Depositing your refund directly into your financial account helps your money work for you.
You’ll have easy access to your balance and funds—making it easier to save, budget and avoid unnecessary fees.
Is a tax refund a good thing?
Sure, it can be nice to receive the extra money.
But you typically receive a refund when you’ve overpaid your taxes throughout the year.
It’s worth touching base with your tax advisor. Ask whether you would benefit from adjusting your withholdings from your paycheck to have less money taken from your pay throughout the year.