What is Direct deposit for tax refunds?
Direct deposit for tax refunds transfers funds electronically from the U.S. Treasury to the taxpayer's checking or savings accounts, eliminating paper check delays and providing the fastest refund access. The IRS requires taxpayers to provide routing transit numbers (9-digit numbers identifying financial institutions), account type (checking or savings), and account numbers when filing. Starting September 30, 2025, paper refund checks were phased out under Executive Order 14247, making direct deposit effectively mandatory for nearly all taxpayers receiving refunds. Traditional 401k coordination enables taxpayers to direct refunds to retirement accounts, maximizing tax-advantaged savings while maintaining the fastest deposit timing under the standard 21-day processing schedule.
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