Debit Cards

It’s the season to think about tax refunds. The airwaves are already full of car dealerships and furniture stores wanting your refund. Everyone is in a hurry to get their refund and the best way to do that is with direct deposit. But what if you don’t have a checking or savings account?

Last year, the IRS introduced a debit card program to a limited group of taxpayers. Unfortunately, the response was real sad as Kay Bell points out in her blog Don’t Mess With Taxes. Because of the lack of interest, the IRS will not be offering the program this year. As I pointed out last year, mid-January is too late to start a program that targets early filers. Especially a program that requires them to sign up and wait to be approved.

But I don’t think the debit card idea is going away. The Treasury Department announced in 2010 that by March 2013, they would not be sending benefit checks to Social Security and VA recipients. If they didn’t want to do direct deposit, Treasury would issue them a debit card. So, I expect a new debit card program from the IRS. It’s the way financial transactions are being handled now. The Oklahoma Tax Commission will only transfer state tax refunds electronically. The only options for this year's refund are direct deposit and a state issued debit card.

If you don’t have a savings or checking account, there is time to open one before you file your return. Or, is your employer already loading your paycheck onto a debit card? If you have one of these cards, you may be able to load your tax refund on that card. I had several clients that did that last year. It’s actually a direct deposit into the account behind the card. Check with your card company  for the routing and account numbers that you will need. (No, the 16 digit card number will not work.)

 

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