Questions and Answers

A taxpayer may fill out the appropriate lines on his/her federal income tax return (for direct deposit to a single account), or file IRS Form 8888, Direct Deposit of Refund (for direct deposit to up to three accounts), to authorize direct deposit to his/her IRA. However, each financial organization’s policy determines whether it will accept direct deposit of a tax refund as a regular IRA contribution. The instructions for Form 8888 state, “You must establish the IRA at a bank or other financial institution before you request direct deposit. Make sure your direct deposit will be accepted.”