Taxpayers may elect to have their federal or state tax refunds electronically transferred into one or more separate bank accounts via direct deposit. Those selecting the direct deposit option from the Internal Revenue Service cut the waiting period for a tax refund by about 50 percent.
Although direct deposit is an option no matter how you file a federal tax return, e-filing combined with direct deposit usually is the fastest option. For example, while it takes the IRS about six to eight weeks to process an error-free paper return, it can process an e-filed return in about 21 days. Errors and inaccuracies can extend the processing time. In addition, if your bank rejects the direct deposit, which can happen if you enter the bank account or routing information incorrectly, the IRS will not try a second time, but instead will issue a paper refund.
The Best Time to File
Unlike with a paper return, there really is no best time to file a federal tax return electronically. Whether you file on Feb. 1 or on April 15, you can expect the IRS to issue a direct deposit refund within 21 days from the date the IRS accepts your return. “Accepted” means that your return has undergone electronic processing and found to be free from any errors.
Tracking a Federal Return
IRS Commissioner John Koskinen recommends that to avoid long wait times on the telephone, you visit IRS.gov and track your tax return using the “Where’s My Refund” online tracking tool. The tool also is available via a free mobile app if you use an iPhone or Android phone. However, if you don't have Internet access, you can call the refund hotline at 1-800-829-1954 after 21 days. In contrast, you can start checking on the status of your return within 24 hours of submitting it if you e-file. You’ll need your Social Security number, filing status and the exact whole dollar amount of your refund. Tracking will provide the receive date, refund approval date and the refund sent date.
About State Tax Returns
In most cases, you’ll receive a state tax return even sooner than a federal return if you e-file. If you e-file a state return and a federal return together, the IRS will forward the return to your state after it accepts your federal return. Otherwise, you can e-file a state return directly. For example, according to the Wisconsin Department of Revenue, you generally can expect to receive a direct deposit refund within seven business days. In addition, Wisconsin provides both an online and telephone option for tracking a refund.
- IRS.gov: More Taxpayers Filing from Home Computers in 2014, Many Taxpayers Eligible to Use Free File
- IRS.gov: When Can I Expect My Refund?
- IRS.gov: Topic 152 - Refund Information
- IRS.gov: IRS Starts 2015 Tax Season; Free File Opens Tomorrow, E-File Tuesday; Expanded Online Services Enable People to Learn About New Health Care Provisions
- Wisconsin Department of Revenue: Electronic Filing
Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.