Direct Deposit Into Another Person's Account

[Maria]

Hi, I have a quick question. I am preparing a kid's return. The kid is 30-year-old and not a dependent of the parents. Can the kid's federal and state refund direct deposited into the parent's account? Also, since the kid is in jail, can the parent sign the returns for the kid.

Thanks a lot.

[SueBaby]

Hi, I have a quick question. I am preparing a kid's return. The kid is 30-year-old and not a dependent of the parents. Can the kid's federal and state refund direct deposited into the parent's account? Also, since the kid is in jail, can the parent sign the returns for the kid.

Thanks a lot.

I had the same situation and yes to both questions.

[gkaiseril]

Poa

Parents will need a Power of Attorney for son's federal and state tax returns or tax matters. The POA can be specific for tax forms and years or a general POA. A copy of the POA would need to be registered with the IRS and state or a copy should accompany the return or an 8453 with the POA needs to be sent to the IRS.

IRS will only allow 1 direct deposit of a refund to a given bank account. Also, bank must allow direct deposit for others into their account. Some banks will not accept a direct deposit to a married couple if the refund is joint and only one spouse listed on the account.

[Jesse]

Be careful

Check w/ the bank. Technically if the childs name is not on the account it should not go into that account. If the numbers on the return are correct it might "slide" in as a deposit, but if not and it nonposts the bank normally will NOT put it into an account that does not have the taxpayers name on it.

As for signing the return, is this an adult child? I wouldn't think parents can sign unless they have a POA.

[SueBaby]

Parents will need a Power of Attorney for son's federal and state tax returns or tax matters. The POA can be specific for tax forms and years or a general POA. A copy of the POA would need to be registered with the IRS and state or a copy should accompany the return or an 8453 with the POA needs to be sent to the IRS.

IRS will only allow 1 direct deposit of a refund to a given bank account. Also, bank must allow direct deposit for others into their account. Some banks will not accept a direct deposit to a married couple if the refund is joint and only one spouse listed on the account.

The parents did have POA since my client was in for a few years, and his money went into their account to pay his bills.

[Jesse]

The parents did have POA since my client was in for a few years, and his money went into their account to pay his bills.

So your situation was fine, but the answer to Maria's questions are not a simple yes.

[SueBaby]

Check w/ the bank. Technically if the childs name is not on the account it should not go into that account. If the numbers on the return are correct it might "slide" in as a deposit, but if not and it nonposts the bank normally will NOT put it into an account that does not have the taxpayers name on it.

As for signing the return, is this an adult child? I wouldn't think parents can sign unless they have a POA.

Yes, all is fine. The parents have POA and the money went into their account and they paid his bills from that. No problems. He is19.

[oceanlovin'ea]

may depend on bank

It may depend on the bank. But when I did my daughter's return, I had it direct deposited into my bank account since she didn't have one.
It went in on time without a hitch.

Linda F

[bertrans]

Poa

The f/2848 must modify the powers to include the authority to sign: an unmodified POA does not include signing power.

[gkaiseril]

Execution of POA

All POAs whether IRS Form 2848 or a general or limited POA prepared by an attorney should be reviewed and verified that the wording and powers are granted are stated correctly. The parents may already have a general POA that lets them perform the signing of the tax return and then they only need attach a copy of that POA.

[Bobby]

Can student pay his tax out of his parents account.

I have a student who owes, but no checking account. Can he use his Dad's?

[oceanlovin'ea]

probably so. As long as IRS gets the money, I don't think they will care where it comes from. But that is just my opinion

Linda, EA

[Burke]

IRS might not care, but by golly, I sure would if it were my account! I'd like to see my kid try that one.

[S T]

If Children Owe

I hardly ever direct ACH payment on electronic file,

and if it is the children's tax return, I email, fax or mail the payment vouchers to the parent and have them write a check - At that point I don't care which account is paying the tax due.

Sandy