Question- I E-filed with the direct deposit option and I got my AZ in check form yesterday . I checked my federal and it says its still processing. Should I be expecting my Federal to be a check as well? Is this something that normally happens? I have never had this happen to me and I verified I had all my bank info in right so I am not quite sure why I got a paper check. Any info or insight would be greatly appreciated
You can verify if you selected direct deposit by looking at the bottom of your tax return. If you see digits there then, you selected direct deposit. Verify that the numbers are correct. If they don't match your account details, the bank will send back to IRS or state and then a check will be issued.
If you checked your federal refund status and your direct deposit numbers are correct, then you should receive your refund when the IRS has processed. Maybe the numbers were different on your state tax return.
That happened to me last year. THE reason is because the IRS says that in order to avoid fraud it does not allow direct deposit of any refund over $6000. This rule was effective Jan 2015: https://www.irs.gov/refunds/direct-deposit-limits
The IRS doesn't tell you on their website what their limit is (annoying!), but that's the limit an IRS agent told me. (If memory serves me correctly it was $6K limit)...So now the question becomes, why does Turbo tax charge you for a direct deposit fee for refunds over the limit when they know that they can't direct deposit such a refund ? I don't care what 3rd party they are passing off to in order to handle the deposit, there shouldn't be a direct deposit fee in this case! Why didn't the tax expert know this?
@Serinity7 There is no direct deposit fee. If you use a 3rd party refund processing service (paying your fees from your refund), then yes the 3rd party will assess their fees. Has nothing to do with direct deposit, however, but rather the service they are providing to collect the fees. To avoid 3rd party fees, pay TurboTax fees with a credit card.
@PaulaM I can only speak for last year, since I haven't completed my tax return this year, but you are INCORRECT. There was a fee to do direct deposit - which evidently is only done by a 3rd party. My experience for several years has been: Direct deposit selection == 3rd Party processing. It has nothing to do with how you paid for turbo tax, so where'd you get the idea that payment method matters? I DID pay for turbo tax with a credit card, and so did my husband, and both of us were charged a processing fee for direct deposit (3rd party or otherwise - who cares? The bottom line is that we were charged a fee for direct deposit) which was taken out of our refunds. The software is designed to charge you when you select direct deposit. I recall it asking me if I wanted direct deposit & I answered "Yes". Once I answered "Yes" it charged me some ridiculous fee. Therefore, my conclusion is: IF you want and select direct deposit of your refund, you are charged a hefty service fee to do so. For you to say there is no fee for direct deposit is absolutely wrong. IF what you say is true, I would NOT have been charged a fee since I paid by credit card. The software didn't care nor seem to know that I had paid by credit card. The software designers know that most people will say Yes they want direct deposit, so I feel this is very deceitful because it didn't give any other choice once I selected "yes". Therefore, IF you select Yes for a direct deposit, THEN a service fee is charged/taken out of your refund. Period . Also why does the software never mention the IRS law/limit for amounts that can be direct deposited since this law existed since 2015? My refund was too large to be direct deposited, yet the software never mentioned it. Apparently the software doesn't know about the limit, so you will be charged although the 3rd party can't do the deposit.
As you stated, 3rd parties may charge fees if you use their processing services. This is not a direct deposit fee. There is no fee for direct deposit at any time, and using a 3rd party to process your refund is not required to direct deposit (completely optional).
See links below for reference.
I had all my info correct and selected direct deposit. I just received a check never knew the "IRS" rejected my direct deposit. The letter said they were unable to complete a deposit and sent it with some extra fees on top 39.99 + some "other" fee of 20. I am pretty sure this is some sort of scam setup between Santa Barbara and the IRS. I will never use turbo tax again. First time in 10 years something like this has occurred using turbo tax.
@rosaThat fee for $39.99 is the fee charged by the banks who handle your refund when you select the "Pay with my Refund" option for paying your TurboTax fees. This is not a fee collected by TurboTax. I'm unsure what the extra $20 fee may be for, but I'm betting that it's an additional fee assessed also by the Santa Barbara group and issuing a paper check.
Apparently the IRS or Santa Barbara had some issue with direct depositing your refund.