Tax Refund This Year? Put It in YOUR IRA
IRS Form 8888 may help boost your retirement savings.
Uncle Sam will now allow taxpayers to direct their refunds in up to 3 accounts this year. You'll need to attach Form 8888 to your tax documents. This "Direct Deposit of Refund To More Than One Account" form will allow you to split your refund to an IRA or a savings account. Unfortunately, those who use tax software like TurboTax won't be able to take advantage of this option.
USAToday provides tips on direct deposit to your account.
- Use the correct routing numbers for each of the banks, mutual funds or other institutions that will receive a portion of your refund. If you submit an incorrect number that fails to make it past the IRS validation check, the IRS will mail you a paper check for the entire refund. And if your refund ends up in someone else's account by mistake, it's your responsibility to work with your financial institution to try to retrieve the money. You may not ever get it back.
- Be sure your financial institution will let you deposit a joint refund into an individual account. Some institutions may not allow it.
- Your financial institution will assume that your IRA contribution is for 2007. If you want the money to be credited as a 2006 contribution — which you can make until April 17 — you'll have to take extra steps.