Direct Deposit Question

[AccTaxMan]

The wife brought the tax information in. They will file a joint return. The wife wants the refund to be directly deposited to her individual account (one that without her husband's name). Any problem?

[BOB W]

The wife brought the tax information in. They will file a joint return. The wife wants the refund to be directly deposited to her individual account (one that without her husband's name). Any problem?

I do it all the time. If the spouse is too busy to come in for the appointment, that's the breaks.

[ChEAr$]

It really depends

I do it all the time. If the spouse is too busy to come in for the appointment, that's the breaks.

on how well you know your clients. I would want some assurance that this was okay
with husband, though. Could be a bit touchy, though.

[kaimana]

If it is a mfj return I would ask for a joint account or tell her that I need his account info so I can allocate the refund to each account.

[RLymanC]

Bank Deposits

I don't believe a joint refund would deposit into a single account, the bank would reject it, on the other hand a single refund will deposit into a joint account.

[erchess]

Surprised if RLyman is right

because deposits often go into the totally wrong accounts because of mis keyed routing and account numbers.

[OtisMozzetti]

Bank may or may not send deposit back to IRS

My understanding is that banks might, or might not, send the deposit back to the IRS if the money comes designated to Mr. and Mrs. while the bank account is owned only by Mr. and by Mrs. If the deposit money is sent back to the IRS, then the taxpayers end up waiting several weeks for a check to come via U.S. mail to them.
It is better not to risk such an outcome, but there are clients who request to proceed anyhow, for example since "it worked last year".

[dyne]

The numbers for a direct deposit must be taken from a check, NOT a deposit slip.
They can be different.

[Burke]

because deposits often go into the totally wrong accounts because of mis keyed routing and account numbers.

You are correct. There is a common belief that these things receive a lot of scrutiny by banks, but my experience is that they do not. The direct deposit will go into any account designated on the return whether it belongs to the taxpayer or not. However, I no longer will show an individual account on a MFJ return or one which belongs to a relative, etc, etc. for my own protection, whether the IRS will do it or not.
Now that they will do multiple accounts, I would consider 1/2 in each acct for a MFJ return which might be advantageous to a couple who is splitting up, or just keeps all finances separately.

[JAinNC]

IRS has no problem with

the direct deposit going into either one of the TP's account on a joint return. But ..... I just make sure the husband and wife actually sign the 8879 in the office (as opposed to one spouse taking it home to the other spouse in these cases) and it is disclosed and checked off by the TP withourt the bank account.

[Burke]

I had one once, where the wife said they did not get the refund the previous year, and we researched it with the IRS. It went into the husband's individual bank account. Good thing it was not a problem with them. Ever since, I don't do it.

[kaimana]

Burke...if you split the deposit of a married couple into each respective personal account do you allocate the refund amounts based on taxes paid by each?

[oceanlovin'ea]

refund in any account

You can designate a refund to go into any account you want to. This is done by computer and no one checks to see if it is in the right account.

My daughter who has a different last name than mine has had her refund deposited into my bank account when she had a refund or had to file for years. Her stimulus payment went into my bank account too.

Several years ago the bank account had to be in the name of the person getting the refund but IRS changed that probably 2 or 3 years ago. I remember learning that at the IRS forum one year.

Linda

[Burke]

Burke...if you split the deposit of a married couple into each respective personal account do you allocate the refund amounts based on taxes paid by each?

That is a very good question, and since I have not done one yet, I cannot answer, but it might be a very good idea especially for a divorcing couple. I suppose that would have to be agreed upon by the two parties up front, and I would probably require both of them to sign some statement to that effect. I HAVE had to calculate MFS for certain taxpayers to determine what each person's portion would be, just so they could allocate it when it came in to the joint account.

[thomtax]

You can designate a refund to go into any account you want to. This is done by computer and no one checks to see if it is in the right account.

My daughter who has a different last name than mine has had her refund deposited into my bank account when she had a refund or had to file for years. Her stimulus payment went into my bank account too.

Several years ago the bank account had to be in the name of the person getting the refund but IRS changed that probably 2 or 3 years ago. I remember learning that at the IRS forum one year.

Linda

I would respectfully disagree. This past year my son got divorced. The agreement stated that she would get the refund. He had it set up to have the refund mailed, so he could sign and have a record that she received it. She pitched a fit, and had it to be direct deposited to her account. The deposit was rejected because it was not a joint account. With all the delay, it caused the stimulus not to be paid in 2008. Now, since he will be filing as HOH, he will lose several hundred dollars by filing for it this year.

LT