November 7, 2008, Newsletter Issue #141: Splitting Your Tax Refund

Tip of the Week

The 2006 tax year is the first time the IRS allows taxpayers to have their tax refund split among up to three different places. The IRS states that you can have your refund split (and directly deposited) into any of the following accounts you have:

Bank checkingBank savingsIRA (must be set up prior to you requesting a direct deposit into it)Coverdell education savings accountHealth savings account In order to have your 2006 tax refund split into up to three financial accounts, you need to file IRS Form 8888. You must use direct deposit as your only method of receiving your income tax refund in order to file this return.

If you want your 2006 income tax refund deposited directly into one financial account, you do not need to file IRS Form 8888. You just need to fill in the proper lines on your Form 1040, 1040A, or 1040EZ. Be sure to include your bank account number and correct routing number.

Be sure to attach IRS Form 8888 to your applicable 1040 when filing your 2006 income tax return with the IRS.

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Jerry Mayo