Military POA

[Burke]

There's no federal rule on this. General banking regs govern this issue, and to my knowledge there are no special rules that apply to tax refunds.

The banking regs allow an institution to accept a joint tax refund as a direct deposit into an account that only belongs to one of the spouses. The banking regs do not require the institution to accept such a deposit.

My software always warns that some institutions do not allow this type of direct deposit.

The only way to know for sure is to ask the bank. But even then, if you're not asking the right person, you may not get the right answer. It's an arcane question that may hinge on variables such as the bank's software. Most institutions do allow a joint refund to go into an individual account. The rules are not the same as the rules that apply to depositing a paper check into an individual account when the check is made out to both spouses.

It may make a difference whose name is on top.

If the bank account is only in her name, and the refund is joint, but the primary taxpayer is her husband, then the primary SSN on the refund won't match the only SSN on the bank account. I'm fairly certain that when the IRS sends a joint tax refund by direct deposit, it is sent with both SSNs. The question is whether the financial institution can properly interpret the second SSN.

If your client has historically filed joint returns with his name on top, it's usually a bad idea to switch and put her name on top.

You can certainly split the refund between two accounts. But that doesn't answer the question of whether her bank will allow a joint refund to go into her account if she's not the primary SSN on the return. Splitting the refund on Form 8888 doesn't change the fact that it's a joint refund, and it doesn't change the primary SSN.

If his name is on top, she should just have the entire refund sent to her husband's account.
If she has a power of attorney, she'll have access to those funds.
BMK

Thanks for the elaborate details. I know I have done this in the past, and it worked just fine. But others keep stating the banks won't accept in some cases. I have decided that we will continue to just do a paper check. Then she can do whatever she wishes when she gets it. I know I read somewhere in the IRS instructions not to DD into single acct on a joint return. However, they also state refund can be deposited into an IRA account. Obviously, these would be in one name only.

[Burke]

See Pub 17 page 22 column 1. I know when I have had this situation there is a box in the program that we just check that then automatically includes or generates a statement that the spouse is signing due to other being in a combat zone.

Pub 17 directions state the spouse is allowed to sign without POA, but a signed statement is supposed to "be attached with return." I have a copy of the military POA, so I am assuming I have to send it "with the return." Since I am efiling (I assume this is not prohibited) I can send either one of the above with 8453. There is a space for it on the form. Will do.

[Koss]

Direct Deposit

Question #2. Can refund be direct-deposited into her account? They do not have joint checking for whatever reason. Or barring that, can I split DD 50/50%?

There's no federal rule on this. General banking regs govern this issue, and to my knowledge there are no special rules that apply to tax refunds.

The banking regs allow an institution to accept a joint tax refund as a direct deposit into an account that only belongs to one of the spouses. The banking regs do not require the institution to accept such a deposit.

My software always warns that some institutions do not allow this type of direct deposit.

The only way to know for sure is to ask the bank. But even then, if you're not asking the right person, you may not get the right answer. It's an arcane question that may hinge on variables such as the bank's software. Most institutions do allow a joint refund to go into an individual account. The rules are not the same as the rules that apply to depositing a paper check into an individual account when the check is made out to both spouses.

It may make a difference whose name is on top.

If the bank account is only in her name, and the refund is joint, but the primary taxpayer is her husband, then the primary SSN on the refund won't match the only SSN on the bank account. I'm fairly certain that when the IRS sends a joint tax refund by direct deposit, it is sent with both SSNs. The question is whether the financial institution can properly interpret the second SSN.

If your client has historically filed joint returns with his name on top, it's usually a bad idea to switch and put her name on top.

You can certainly split the refund between two accounts. But that doesn't answer the question of whether her bank will allow a joint refund to go into her account if she's not the primary SSN on the return. Splitting the refund on Form 8888 doesn't change the fact that it's a joint refund, and it doesn't change the primary SSN.

If his name is on top, she should just have the entire refund sent to her husband's account.

If she has a power of attorney, she'll have access to those funds.

BMK

[Burke]

Thanks. Question #2. Can refund be direct-deposited into her account? They do not have joint checking for whatever reason. Or barring that, can I split DD 50/50%?

[ddoshan]

See Pub 17 page 22 column 1. I know when I have had this situation there is a box in the program that we just check that then automatically includes or generates a statement that the spouse is signing due to other being in a combat zone.

[ddoshan]

[QUOTE=Burke;134906]Does military POA to spouse have to go to IRS with 8453 due to deployment in Afghanistan?
Spouse signed 8879.[/QUOTE

When husband is in a combat zone can't the wife just sign normally for him. I don't recall having to send in anything else such as the POA.

[Burke]

Does military POA to spouse have to go to IRS with 8453 due to deployment in Afghanistan?
Spouse signed 8879.