Savings options for your tax refund - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Savings options for your tax refund

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CHARLOTTE, NC (WBTV) -

Even though you will have to wait until January 3oth this year your file your income taxes, Uncle Sam is hoping to make up for delayed fiscal cliff negotiations earlier this year.

Those entitled to a federal income tax refund can now get their money divided into three accounts.

"If you have it going into one account that means all your funds are in one account, but if you are able to split it up it's kind of like hiding some of your money from yourself," Antonio Stewart with Liberty Tax.

The IRS can have a portion of your refund sent to your checking account to help you pay bills.

Another amount directed to your savings account.

The third chunk of cash to purchase savings bonds.

"You can buy up to $5000.00 savings Ebonds," said Stewart.

"It's a way to get you to save."

These options are only available if you choose to receive your refund via direct deposit.

"If you do get direct deposit it'd going to be faster," said Stewart.

And it will also saves you in fees.

If you do want to divide your refund into multiple accounts or buy savings bonds, you'll have to send along Form 8888, Allocation of Refund, with your individual return.

But there are some things you need to pay attention to or your good deposit intentions could go astray.

First, be sure to check the box on your Form 1040 that indicates you are splitting up your refund. It will let the IRS know you want your money sent to multiple accounts and that agency employees need to look to your Form 8888 for details.

Form 8888 includes a blank check diagram showing you exactly what to look for and enter.

And about that 1040 section for a single direct deposit: Leave it blank.

If you complete the account information on your main return, don't be surprised if the IRS then sends all your refund money to that one account.

 

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