 New tax options can help encourage taxpayers to increase savings with refund
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Laura Connerly
Instructor – Family Resource Management
Tax season has arrived, and many people are already planning how they’re
going to spend their tax refund.
Seventy-five percent, or about 75%, of U.S. taxpayers do receive a refund.
And the average refund is around $2,000.
Financial planners recommend that we spend some and save some. The IRS has
made it more convenient for us to do that, by offering Direct Deposit. Direct
Deposit is where your tax refund goes directly into your bank accounts. And this
year, you can designate up to three accounts. That means your tax refund can be
divided among three different banking accounts.
You can put part of your tax refund into your checking account for spending
and part of your tax refund into your savings account.
I think this is a really easy way to save, because the money goes directly
into the savings account. You never see it; you never have your hands on the
money. What we don’t see we’re less tempted to spend. So it’s a really great way
to save.
Now you can use this direct deposit option with any of the "1040" series. So
that would be: 1040ZE or 1040A. Any of those "1040" forms, you can use direct
deposit.
The form you’ll need to designate direct deposit is Form 8888. You’ll need
the correct routing number and bank account number for any of the accounts that
you’re using.
You can get these forms from the IRS website, you can download them. And you
can also get more information about direct deposit. And that website is
www.IRS.gov.
For more information on building your savings you can contact your local
office of the Cooperative Extension Service and ask for the FAQ sheet "Building
Your Savings."
Announcer:
To learn more, contact your county Extension agent and follow the links in
this section.
Related Links:
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