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Tax refunds from amended e-filings now can be directly deposited

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It's never fun having to re-do your taxes. But if it means you'll get a refund, or a larger amount than with your original filing, it's worth it.

And now amended filers can have that refund amount sent straight to a financial account.

The Internal Revenue Service announced today that people who e-file a Form 1040-X, Amended U.S. Individual Income Tax Return, now will be able to select direct deposit as the money's delivery method.

More X filing going electronic: The IRS began accepting e-filed 1040-X forms in 2020. Most tax software programs have added the amended filing option to their services.

That means that taxpayers who discover they need to file an amended return, which the IRS says is around 3 million a year, can use that same tax preparation package to electronically file their 1040-X.

And now, if that electronic X file gets them a refund, they can have it directly deposited.

The direct deposit request is the same as with original 1040 filings. Simply select direct deposit on the electronic 1040-X and enter your banking or financial institution information. Then wait for it to show up in your account.

Faster, safer refund deliveries: That should be much sooner than before, when Form 1040-X filers had to wait for a paper refund check to arrive via the U.S. Postal Service.

"This important update will cut refund time and reduce inconvenience for people who file amended returns," said IRS Acting Commissioner Doug O'Donnell.

It's also a natural extension of the IRS standard return processing system.

"We always encourage direct deposit whenever possible," added O'Donnell. "Getting tax refunds into taxpayers' hands quickly without worry of a lost or stolen paper check just makes sense."

Still not a quick turnaround: If you can't file your 1040-X electronically, then you're out of quicker refund receipt luck. The IRS says direct deposit is not available on amended returns submitted on paper forms.

And amending an earlier filing still will take a while. Current processing time is more than 20 weeks for both paper and electronically filed amended returns, according to the IRS.

The reason for the X file delay? The IRS says processing an amended return remains a manual process, even if it's filed electronically.

But e-filing at least reduces the mail time. Plus, opting for direct deposit if you e-file your 1040-X will speed up arrival of any associated refunds.

And regardless of whether you file your 1040-X electronically or snail mail it, you can use the IRS Where's My Amended Return? online tool to check the status.

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