Income Tax Return Refund

Tax Refund
Planning

What is a Tax Refund? An Income Tax Return Refund is the result of too much Tax Withholding - or estimate tax payments - by a taxpayer throughout a tax year. In essence, a taxpayer hands over his or her own hard earned money to the IRS or State interest free, only to get it back via a tax return refund in many cases over a year later. Are you putting a self imposed tax refund penalty on yourself?

Granted, in the past a taxpayer did not have many tools to be able to plan for a zero tax refund or tax balance a tax return. The W-4 form or paycheck tax withholding form is not set up to provide a dollar tax withholding amount per paycheck and thus is confusing for most taxpayers. We at eFile.com have closed this gap for taxpayers and have developed the Taxometer tool. This free tool gives a taxpayer a comprehensive way to not only set personal tax return goals but also taxercise a paycheck and the upcoming tax return. The Taxometer will guide a taxpayer through from paycheck to tax return to W-4.

Tax Refund Deposit Options

First, plan and estimate your tax return with the eFile.com Tax Calculator before you even prepare and e-File via the eFile tax app. You will know whether you can expect a tax refund, owe taxes or neither. Should you expect a tax refund, consider the following tax refund options below. During checkout on eFile.com, you will be presented with these tax refund transfer options.

If you don't wish to read on, simply use the eFile.com DATEucator tool to get estimated Dates on when you can expect your tax refund based on the deposit options selected. The tool is free, interactive and will provide you the answer you are looking for.

Pro/Con Comparison of Tax Refund Deposit Methods

Deposit Type
Pro/Con
Fees, Other
e-Collect Direct Bank Deposit
Select e-Collect during checkout in the eFile.com tax app if you are expecting an IRS and State Tax Refund (not available if you're only expecting a State Tax Refund), your return is not free and you don't want to pay your tax preparation fee by credit card or don't have a credit card.
A: Your eFile.com tax preparation fee will be deducted from your tax refund, thus you will not need a credit card.

B: A processing fee will be charged by EPS. It's the lowest in the industry.
IRS Direct Bank Deposit
Select this option during checkout in eFile.com app if your return(s) are free or you prefer to pay your eFile tax preparation fee by credit card. This method will get you tax refund the fastest way.
A: You prefer to pay your eFile.com tax preparation fee by credit card. No other fees apply with this method.
IRS Check in the Mail
Select this tax refund deposit method if you either don't have a bank account or for other reasons you don't want to receive your refund directly to your bank account, e.g. you have a foreign address on your tax return etc. Plus, you don't mind paying the tax prep. fees by credit card.
A: If your tax return preparation is not free, you can only pay by credit card. No additional fees apply with this method. Your refund check will be mailed to the address listed on your IRS tax return.

 

Bank Deposit Options

You can have your IRS tax refund and/or State tax refund deposited directly into your bank account. If your tax return is not free on eFile.com, your tax preparation fee can be paid via credit card only. Alternatively, you can select the eFile.com e-Collect bank deposit option. This option will enable you to deduct any tax preparation fee from your tax refund, thus you will not need a credit card to pay for any fees. The processing bank, not eFile.com, will charge a small convenience fee for this service.

e-Collect - Direct Bank Deposit with Deduct Fee from Refund

This options requires that you have a bank account, account number and bank routing number. Should your tax return not be free, any applicable tax preparation fees will be deducted from your expected tax refund. Furthermore, should there be a problem with the bank transfer (e.g. you entered in your wrong bank account number or name), the processing bank - EPS Financial - will track this for you, which adds an additional layer of security for you. The processing bank - not eFile.com - will charge a fee for the bank services provided. The tax preparation fee will be deducted from your tax refund and the tax refund will be transferred by EPS Financial to the bank account you entered during the tax preparation process. Be aware that you will not see your bank account number - but the account number of EPS Financial - on your PDF return form, as eFile.com will instruct the IRS to transfer your refund to EPS. Please do not worry about this. The tracking method of this option is just as fast and up-to-date as all other deposit methods.

After you have selected e-Collect and successfully e-Filed an accepted tax return, take the following steps to check on your tax refund status:

  1. Check your tax return status on eFile.com
  2. Check your refund status with the IRS and the status of your State tax return(s)
  3. Check your e-Collect tax refund payment status

Direct Bank Deposit with Deduct Fee by Credit Card

Just like the e-Collect option outlined above, you will need to have a bank account, account number and bank routing number. In addition, you will need a credit card to pay for your tax preparation fee should your return not be free on eFile.com. Your expected Tax Refund will be electronically issued and transferred from the IRS (U.S. Treasury) to the bank account you entered during your eFile.com online tax return process. This transfer is free of charge. Should you enter an incorrect bank account number, your funds will be transferred back to the IRS and/or State and the IRS and/or State will issue a check in the mail to you. The online tracking method is as fast and up-to-date as the e-Collect option. Follow steps 1. and 2. above.

Caution for joint filers: Some banks may not accept a direct deposit of a joint tax refund into an individual account. If your filing status is married filing jointly, please check with your bank or financial institution before requesting the deposit of a joint refund into an individual account.

If you are a U.S. citizen or resident living and/or working abroad and you have a U.S. bank account, you can directly deposit your refund into that account. Learn more about taxes as a U.S. citizen or resident living overseas.

IRS or State Refund Check by US Postal Mail

If you do not have a bank account or for any other reason you wish to receive a tax return refund check from the IRS or State tax agency mailed to you by U.S. Postal Mail, select this option during checkout from the eFile.com tax app. Once your tax return has been accepted by the IRS and/or State, a paper check will be sent to you through the U.S. Postal Service. It generally takes at least twice as long as direct deposit to receive your refund through the mail.

Make sure that you review your name and address information on your tax return to make sure it's correct before you submit it to the IRS. If you move or change your address after you submitted your return, you will need to complete and sign online Form 8822, Change of Address, so the IRS has the latest address on file to send the check to you. Once you sign the form, select one of the save options, print it, and mail it to the IRS. 

If you are a U.S. Citizen or Resident and you are expecting a refund check, you might need to register with the State Department's Office of American Citizens Services and provide them with your most recent contact information (local address, phone number, email address, etc.) and contact then as often as possible when your information changes. This will help them reach you about the status of your delivered check in case the check does not list your correct mailing address. 

Check your IRS and or State tax refund status via the steps listed above. If the information in the tool informs you that your refund check is mailed, but you have not received it within 45 days after the mailing date the IRS provides to you, call the International Taxpayer Service Call Center at 267-941-1000 (Monday-Friday, 6 am-11 pm EST). 

Contact us if you have further questions about your tax return or tax refund status.