In every county throughout California, including Los Angeles County, Ventura County, Orange County, and Santa Barbara County, you have more choices for the direct deposit of your 2006 federal income tax refunds. Now, you can split refunds among up to three accounts held by as many as three different U.S. financial institutions, such as banks, mutual funds, brokerage firms or credit unions. Those financial institutions need not be in Los Angeles, Ventura, Orange or Santa Barbara counties but can be anywhere in California or outside of California.
The option of a split-refund is available to those of us who choose direct deposit regardless of whether we filed the original returns on paper or in electronic format. However, those of us filing Form 1040-EZ-T, Request for Refund of Federal Telephone Excise Tax, or Form 8379, Injured Spouse Allocation, cannot opt to split our refund.
You can continue to use the direct deposit line on Form 1040 to electronically send your refunds to one account. But if you want to split direct-deposit refunds among two or three accounts or financial institutions, you should complete new Form 8888, Direct Deposit of Refund to More Than One Account.
The IRS will electronically deposit refunds to your accounts held by a U.S. financial institution if an accurate account number and American Bankers Association (ABA) routing number is supplied and the financial institution accepts direct deposits for the type of accounts designated. If an error is made, the IRS assumes no responsibility for it.
You can take advantage of important differences in saving time when you do things electronically instead of by paper. For those of us filing our taxes electronically, the refund is deposited in our account within two weeks. A paper check refund takes three weeks. Those of us filing taxes on paper, the process is longer; we get our direct deposit refund within four to six weeks or paper checks within six weeks.
To speak about this topic with a California tax attorney, call Mitchell A. Port at (310) 559-5259.