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You Should Set Up Direct Deposit When You File Your Tax Return. Here's Why

Learn why you should set up direct deposit with the IRS and how to do it ahead of tax season.

If you use direct deposit, you should get your tax refund in about 21 days.
Sarah Tew/CNET

This story is part of Taxes 2022, CNET's coverage of the best tax software and everything else you need to get your return filed quickly, accurately and on-time.

The first day individual filers can submit their 2022 tax returns is Jan. 23. If you haven't submitted your tax return but plan to, you should either file through a tax software company, hire a tax professional or find ways to get tax help for free. When you do file online, the IRS recommends setting up direct deposit to get your refund as soon as possible.

Adding your banking details when you file your taxes only takes a few minutes. When you do, any money owed to you -- such as your tax refund -- will go straight to your account within 21 days, on average. Most people use direct deposit as the method of payment for receiving tax refunds and stimulus checks. Some groups, such as Social Security beneficiaries, are even required by the US Treasury to use direct deposit.

We'll explain why you should set up direct deposit with the IRS and how to do it. For more details, here's what to know about filing your 2022 tax return with the IRS. Also, here's why you should tell the IRS and USPS if you've moved recently.

Your tax refund could come back sooner with direct deposit

When you file your taxes, you usually have the option to add a bank account so you can receive your refund through direct deposit. "The best and fastest way to get your tax refund is to have it electronically deposited for free into your financial account," the IRS says. You can have your money deposited in up to three different accounts if you'd like to split up your tax refund.

You can also expect a quicker refund if you combine direct deposit with electronic filing, rather than printing out and mailing in paper tax returns. In fact, the IRS recommends setting up direct deposit to avoid any delays with your refund. The average time it takes to get tax refunds back for those who filed electronically with direct deposit is less than 21 days, according to the IRS

You should also be aware that the IRS is asking taxpayers to avoid filing paper returns, if possible, and instead e-file. Filing your return the old-school way could cause another processing delay. Filing your tax return closer to the beginning of tax season rather than closer to the deadline will also set you up to get your tax return faster.


Get your money quicker with direct deposit.

Sarah Tew/CNET

It's cheaper to send your refund through direct deposit, instead of paper check

Each paper refund check issued costs US taxpayers more than $1, but it only costs a dime for each direct deposit made, according to the IRS. In 2020, 125.3 million refunds were issued, with over 23 million sent by mail, according to Bankrate.

That means in 2020, it cost taxpayers roughly $23.3 million for paper check refunds to be sent out and about $10.2 million for direct deposit.

Errors or updates you'll need to fix when you file

If you'd like to have your tax refund spread out across several accounts, now's the time to do that. When setting up direct deposit on your taxes, you can add up to three different bank accounts, which can be beneficial if you're using one as a savings account.


Direct deposit is cheaper than receiving a check.

Sarah Tew/CNET

How to set up direct deposit when you file your 2022 taxes

When filing taxes, select Direct Deposit as your refund method in your tax software, then type in your bank account and routing numbers -- you can still add your bank account information even if you're not getting a refund. You can find your account and routing number on your bank's website when you sign in, call your bank branch or locate the numbers on a check. You can also give your tax preparer this information if you don't file your own taxes. 

The IRS says your refund should only be deposited directly into a US bank or US bank-affiliated account, and that it needs to be in your name, your spouse's name or both if it's a joint account.

What if you don't have a bank account for direct deposit?

If you don't have a bank account and still want to set up direct deposit with the IRS, you have options. The first, and most obvious, is to open a new bank account.

The FDIC's GetBanked page includes a banking locator service and info to help you review and choose a bank. If you prefer a nonprofit, member-owned banking option, consider a credit union. Visit CNET's best checking account and best saving account features for additional information on bank accounts.

If you don't want to open a bank account, you can also receive your tax refund via direct deposit with a prepaid debit card. All cards that accept direct deposit will have account and routing numbers that you can enter in your tax return.