Susan Tompor: Get your refund directly deposited without a hitch

By Susan Tompor

Detroit Free Press

Direct deposit sounds like a no-brainer when it comes to getting a tax refund. Who would want to waste time and keep running to the mailbox to keep an eye out for a fat tax refund check?

But it's not foolproof. Ever think about what happens if you enter the wrong account number? Or if somehow that refund is deposited into someone else's bank account?

"It may not happen very often, but when it happens to you, it's a very big deal," said Steve Kenneally, vice president of the American Bankers Association.

The IRS warned taxpayers this year that listing incorrect bank account information a key, and common, error to avoid. Other common errors include: Not signing the forms, giving the wrong Social Security numbers, spelling a dependent's name wrong (or in a different way than it shows up on the person's Social Security card.)

Give the IRS the wrong bank account number? Unfortunately, there is not a way to change a direct deposit account number after electronically filing that return.

If you spot trouble immediately, you might have a chance at stopping the direct deposit. If the tax return has not already posted to its system, you can ask the IRS to stop the direct deposit by calling 800-829-1040 from 7 a.m. to 7 p.m. weekdays.

The bank isn't required to match up the name on the account to the account number. In some cases, the bank might refuse the direct deposit. But in many cases, it goes to the account number provided, Kenneally said.

Eight out of 10 taxpayers use direct deposit to get their federal income tax refunds. Taxpayers can request direct deposit even if they still file an old-fashioned paper return.

Direct deposit is promoted as a way to avoid waiting a long time for a tax refund and stop thieves who go through mailboxes and steal tax refund checks.

Before you file a return: See Page 2 of the regular 1040 form in the refund section. On Line 76b, you list the routing number of your bank and check a box marked "C" for whether the account is for checking or savings. You'd list your bank account number on Line 76d.

You might also need Form 8888 for the Allocation of Refund, which is used to split your refund among two or three bank accounts. You can also use the form to buy up to $5,000 in paper or electronic Series I savings bonds.

Kenneally, of the bankers association, said consumers should talk with their bank to make sure the routing number on the check is the same routing number that would be used for direct deposit. In most cases, the numbers are the same. But some banks use different routing numbers for direct deposit.

Avoiding a direct deposit glitch is far easier than trying to correct a problem afterwards.

"I had one client a few years ago where I entered the wrong account number," said Frank St. Onge, enrolled agent for Total Financial Planning in suburban Detroit.

The tax refund ended up ultimately being sent by mail from the IRS, after the bank returned the money to the IRS noting that this was not the correct account.

"That has made me be very sensitive to checking the numbers for the bank routing number and account number for any refund on a tax return," St. Onge said.

Susan Tompor, the personal finance columnist for the Detroit Free Press, can be reached at