There are several different options available when it comes to receiving your tax refund. You may be wondering which is the best option for you. When you file you should file electronically. This is called e-file. You can do this if you use computer software or go to an account or a tax preparation business. This will help to speed up the time it takes the IRS to review your taxes and send out your refund.
1. Tax Refund Check
Your first option is to receive your refund as a check. The IRS will mail the check to your house. The IRS will issue a refund within six weeks of receiving your return. If you file electronically the process is sped up and you will be issued a check within three weeks. You can visit the IRS website to track the status of your refund check. It is important to allow an additional week or two for the time that your return and/or check will be in the mail. This is the slowest way to receive your refund. Additionally your check may be lost in the mail.
2. Tax Refund by Direct Deposit
Your best option is direct deposit. If you file early in the year you can receive your refund in as little as ten days. If you file by mail this process will be slowed down some. You can have your money direct deposited into a checking, savings or retirement account. You can have your deposit split into three different accounts as well. This is a quick and easy way to receive your refund. It is also very safe.
3. Tax Refund Anticipation Loan
The third way to receive your refund is through a refund anticipation loan. This loan may be referred to as a rapid refund or instant refund. Businesses will offer to give you your refund in just one or two days. They charge exorbitant fees to process this loan. It is foolish to pay so much of your refund to receive it just a few days sooner. You can save money by steering clear of this option.
4. Avoid Having a Tax Refund
Now that you have your refund you should ask yourself how to avoid having one next year. Essentially you are loaning the IRS that money free of charge. If you have a tight budget you may consider adjusting your withholdings so that you do not end up with a huge refund at the end of the year. This can help you to make ends meet each month. It is important to receive just the right amount so that you do not owe anything either.
