With tax-filing season upon us, here’s a quick tip on how you can save some extra money this year. If you’re expecting a tax refund, rather than have that refund sent in the form of a check or direct-deposited into your checking account, consider filing IRS form 8888 Allocation of Refund. Form 8888 allows taxpayers to have their refunds deposited into multiple accounts of their choice, including IRA accounts, Medical Savings Accounts, Coverdell Education Savings Accounts, or other financial services accounts such as investment or brokerage accounts.
Many people who receive tax refunds use the cash as fun money, but it’s never a bad idea to save some extra money. By using form 8888, the funds will be deposited directly into an account of your choice, thus avoiding the temptation to spend it on something else. If you need help setting up an IRA or other investment account, please contact us at Dunston Financial Group to discuss your options.