In TaxSlayer Pro, where you enter direct deposit information in the individual tax return depends on whether the return is being electronically filed or not.
You'll need to know the account's Routing Transit Number (RTN), Depositor Account Number (DAN), and the type of account, whether checking or savings. If the taxpayer has a paper checkbook, get these numbers from a check rather than a deposit slip. (Some banks use an internal routing number on deposit slips rather than their RTN.) The refund can be delayed if incorrect account information is transmitted to the IRS.
Electronic Return
If the tax return is being electronically filed and the taxpayer wants to transmit direct deposit information to the IRS, from the Main Menu of the tax return select:
- Mark Return Electronic - If you are offering bank products, you'll be asked if the taxpayer wishes to utilize a bank product. Select Yes or No as appropriate, and if yes be sure to choose an option with the word "deposit" in the name.
- Direct Deposit - Enter the routing number, account number, and type of account. To help ensure accuracy, you'll be asked to enter each number twice.
- If the taxpayer desires the deposit to be split among two or three accounts, select Form 8888 to enter the information about the other accounts.
Paper Return
To print direct deposit information on a return being filed in paper form, from the Main Menu of the tax return select:
- Payments, Estimates & EIC
- Direct Deposit Information - Enter the RTN twice, the account number twice, and indicate the account type, whether checking or savings.
- If the taxpayer desires the deposit to be split among two or three accounts, select Form 8888 to enter the information about the other accounts.
Direct Deposit Limits
In an effort to combat fraud and identity theft, the IRS limits the number of refunds electronically deposited into a single financial account (or pre-paid debit card) to three. The fourth and subsequent refunds automatically convert to a paper refund check and are mailed to the taxpayer. When this happens, the taxpayer will receive a notice informing them that the account has exceeded the direct deposit limit and that they will receive a paper refund check if there are no other issues with the return.
The limit applies to financial accounts, such as bank savings or checking accounts, as well as to prepaid, reloadable cards or debit cards.
Few taxpayers are affected by this limitation. That said, the limit may affect families in which the parent's and children’s refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks.
The direct deposit limit helps prevent criminals from easily obtaining multiple refunds. It also protects taxpayers from preparers who try to obtain payment for their tax preparation services by depositing part or all of their client's refund into the preparer's own bank accounts.
Direct deposit must only be made to accounts bearing the taxpayer's name. Preparer fees cannot be recovered by using Form 8888 to split the refund or by preparers opening a joint bank account with taxpayers. These actions by preparers are subject to penalty under the Internal Revenue Code and to discipline under Treasury Circular 230.
Additional Information: