December 12, 2008, Newsletter Issue #146: IRS Tax Happenings

Tip of the Week

Every tax year finds new tax events and laws that affect taxpayers. This year is no different. Here is one of the most important as far as many taxpayers will be concerned: Split Refund Option.

2006 is the first year that taxpayers can receive their refunds via direct deposit into more than one financial institution account. Known as ‘New Split Refund Option’, this option allows taxpayers to divide (split) their tax refund into their bank, mutual fund, brokerage firms, or credit unions. Taxpayers are allowed to do this for up to three accounts.

Tax Form 8888 – Direct Deposit of Refund to More Than One Account. The IRS also wants taxpayers to know that there have been improvements made for the 2006 tax year regarding the Free File e-filing program. This program is found on the IRS website. Taxpayers do not have to be concerned about the variety of offerings from partners (such as Refund Anticipation Loans), since they have been removed from the site. In previous years, taxpayers had to muddle through offers from service providers prior to submitting their tax returns. (This is improved website feature is considered a 2006 tax year law event.)

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