Earned Income

[mj-askformarcusj]

Can a tax refund be directly deposited into a Roth IRA account?

[dmertz]

A tax refund is just cash.  You can do anything with it that you can do with cash.

[SusanY1]

If the Roth custodian can provide a routing and account number that work with the Automated Clearning House (ACH) then, yes, a tax refund can be directly deposited to the account.  

[dmertz]

Be aware that doing a direct deposit to an IRA will be credited as a current-year contribution, not a prior-year contribution.  Also, there could be problems if there is a long delay in generating the refund such that it doesn't happen until the following year and there could be problems if the IRS makes changes to your tax return that results in an excess contribution to the IRA.  These problems are manageable, but is the convenience worth the potential complications?

[mj-askformarcusj]

Thank you for your response.  I agree.  My concern was this functionality was not available with Turbo Tax Home and Business 2024.  Attempts to do so failed and the explanation, was it could not be done.

Perhaps, I overlooked something.

[mj-askformarcusj]

Thank you for your response.  I agree.  My concern was this functionality was not available with Turbo Tax Home and Business 2024.  Attempts to do so failed and the explanation, was it could not be done. The contribution must be removed or be penalized.

Perhaps, I overlooked something.