topic WARNING: Direct debit from a Savings Account might not be authorized by Your Bank! in After you file

WARNING: Direct debit from a Savings Account might not be authorized by Your Bank!

mafoll919 — Tue, 14 Jul 2020 20:46:19 GMT

I am livid with TurboTax right now because not all financial institutions will allow direct debit from savings accounts. It gives you the option to select direct debit from your checking or savings accounts when scheduling payments to the IRS or to your State. I selected the savings account option, and the transaction - scheduled to occur at the payment deadline - was denied by my financial institution.

Consequently, my State regarded this declination "Insufficient Funds" and I was assessed a 10% penalty from my State (NC)! Luckily, I was able to discover the error in time to avoid a similar penalty from being assessed from the IRS.

I am angry with TurboTax because it represented savings account as a routine option for scheduling direct debit payments (see FAQ https://ttlc.intuit.com/community/tax-payments/help/what-is-direct-debit-and-how-does-it-work/00/25634#:~:text=In%20TurboTax,%20you%20can%20pay%20your%20IRS%20taxes,paper-filers%20(although%20we%20do%20offer%20a%20simple%20workaround). Nowhere is any notice or warning given that certain financial institutions do not allow for direct debits from savings accounts.

I strongly urge TurboTax to add this disclaimer, and I will NOT be using this service again unless TurboTax makes this right for me.

Re: WARNING: Direct debit from a Savings Account might not be authorized by Your Bank!

CatinaT1 — Tue, 14 Jul 2020 21:02:46 GMT

You mean this disclaimer that is on the link you posted?

(the blue link) We'll also offer the direct debit option for your state return if your state supports it (not all states do).

Re: WARNING: Direct debit from a Savings Account might not be authorized by Your Bank!

mafoll919 — Tue, 14 Jul 2020 21:22:40 GMT

No - that is referring to a different concept. What I'm talking about is a Bank's policy not to allow debit transactions from a Savings Account. What that is referring to is a State's policy not to allow individuals to pay owed amounts via Direct Debit electronically.