The U.S. income tax system is a pay-as-you-go system. If you are employed, your employer typically withholds a portion of your paycheck and sends it in to the Internal Revenue Service on your behalf. If you are self-employed, you typically must file quarterly tax payments. These tax payments are based on estimates of what your income tax obligation will be for the year. If you pay in more than your tax obligation you may choose from a variety of methods to receive your income tax refund.
You may not be required to file a federal income tax return, but if you have paid taxes and are due a refund, you must file an accurate and complete federal income tax return in order to claim it. The IRS issues refunds within six weeks of receiving the completed paper tax return. The IRS issues refund checks with three weeks of receiving tax returns that are filed electronically. Refunds on amended returns may take up to 12 weeks before the check is issued.
You may elect to have your federal income tax return direct deposited into your bank account. You can have your refund deposited into your checking account or savings account. You can have your refund direct deposited into your individual retirement account. You can even have your refund split up with portions deposited into as many as three different accounts. Direct deposit refunds are faster, more secure and more cost-effective than paper checks.
The IRS has traditionally paid tax refunds by a paper check sent through the mail, and this option is still available to taxpayers. Taxpayers who do not have a bank account, or who may be moving and changing their financial institution, may be more prefer a paper check. You must draw a line through the boxes on Lines 74b and 74d, and leave the boxes on Lines 74a and 74c unchecked if you wish to receive a paper check. The IRS will send your paper refund check to the address you listed at the top of your income tax return in the name, address, and Social Security number section.
You can direct the IRS to deposit your tax refund into your Treasury Direct account where you may use the refund to purchase marketable treasury securities. You may use your tax refund to directly purchase up to $5,000 of series I savings bonds even if you don't have a Treasury Direct account.
The IRS may use your federal income tax return to pay federal or state income taxes, or other debts to federal agencies, such as past-due student loans. The IRS can do this without your consent or knowledge. This process is referred to as a refund offset. You may elect to have all or a portion of your tax refund applied to your estimated taxes for the next tax year.
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