This part I actually don't think is that complicated. Only one of those bank accounts paid a tax liability or received a tax refund last year. The same one will receive this direct deposit.
I'm not the above poster, but I took your comment to mean direct deposit from your employer to your account, not direct deposit from the IRS to your account (for tax refunds, which is what I assume the above poster means).
Except it's been massively increased and now comes with monthly cash disbursements sent via direct deposit whether you filed your taxes or not (eg, those who are too poor to need to file taxes and never got any tax "credit").
I didn’t know I had to register. The IRS had my info on file for the first round of stimulus payments so I figured they’d just do the same thing this time around. Apparently you’re supposed to register for it? The wording is unclear to me. But the response after filling in that form, at least for me, was that they are mailing the check and not direct depositing it.
Would it have been better for the IRS to validate the direct deposits to be more accurate, or was this best to get payments to people as quickly as possible?
Some potential issue I see if you don't do some exception analysis with direct deposits:
* filed jointly in 2018/2019 and spouse is deceased
* couple is divorced? join in 2018, single file in 2019?
* dependents no longer dependent (deceased, filing individually, etc)
* direct deposit went to wrong account (wrong account number, tax preparer's bank account, etc)
* bank account closed
I think it could mostly be automated. Your tax filing from the previous year is put in a system and can figure out if you get money. They could even do an equation based on cost of living and other factors like number of dependents. They could either send out a check or direct deposit it.
If something changes (like a job loss) you submit a form and they send you the money. They can figure out if you owe them the money back on your next tax filing.
This does work for children since they would be counted as a dependent. This would probably change your tax filing which could change the calculation.
This would also work for elderly since they would still be filing taxes.
It would be easier to do it universally but it would likely cause other issues like more inflation.
I was trying to figure out where this was myself, digging thru last year's tax forms. Looks like you need to itemize and complete a Schedule A to use it.
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