Tuesday, February 11, 2014

Different Ways to Receive a Federal Tax Refund

William Perez for About.com writes: If you find that you have a refund on your 2013 tax return, there are five different ways of receiving your refund from the IRS.
Refund section of Form 1040
1. Apply it towards your 2014 estimated tax. You can apply some or all of your refund to be used as an estimated tax payment for next year. This is a particularly relevant option for the self-employed or retirees who send in estimated tax payments. This is found on Line 75 of the 2013 version of Form 1040.
2. Refunds by check. The IRS mails you a check after processing your tax return, usually within 21 days. If the check is lost or stolen, the IRS has procedures in place to trace the check and recover the missing funds. If you choose to have your entire refund sent by check, it's a good idea to cross out the direct deposit data fields on Line 74 of Form 1040. This will help prevent the possibility of someone altering that section of your tax return.
3. Refunds by direct deposit. This is typically the fastest way to get a refund, as the IRS sends out direct deposits earlier than they mail out refund checks. Just be sure to triple check your bank routing and account numbers, as the IRS claims no responsibility if a refund is directly deposited into the wrong account. Bank account information is entered on Line 74 of the 2013 version of Form 1040.
4. Use refunds to purchase savings bonds. You can have some of your refund issued in the form ofseries I savings bonds from the US Treasury. The Treasury will mail you paper savings bonds. You can buy savings bonds increments of $50, up to a maximum of $5,000 for the year. Use Form 8888 to direct some of your refund to savings bonds.
5. By direct deposit to multiple accounts. You can use Form 8888 to split your refund among different delivery methods. You can ask the IRS to direct deposit portions of your refund in up to three bank accounts.

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