IRS Phasing Out Paper Tax Refund Checks What You Need to Know

The Internal Revenue Service (IRS) has announced a significant update that will change how taxpayers receive their tax refunds. Starting in 2025, the IRS will phase out paper tax refund checks for individual taxpayers. This initiative aims to modernize the tax system and enhance the security of tax refunds. Let’s explore the implications of this change, how it affects taxpayers, and the steps you can take to receive your refund securely and efficiently.

A tax refund check resting on a wooden table

Understanding the IRS Update

The IRS is phasing out paper checks to improve efficiency and security. Paper checks can be lost, stolen, or delayed, causing frustration for taxpayers and increased risks of fraud. The switch to electronic payments is a vital part of this effort.

For instance, in 2022 alone, around 5 million tax refunds were sent as paper checks that faced delays or other issues. In contrast, the IRS aims for direct deposits to process in as little as 21 days, significantly faster than paper checks. As digital transactions become the norm, the IRS is urging taxpayers to adopt direct deposit as a safer and quicker option for receiving refunds.

This move is vital as 70% of Americans now prefer electronic forms of payment, making direct deposit a logical choice in our increasingly digital economy.

Benefits of Direct Deposit

One of the main advantages of direct deposit is the speed of receiving refunds. According to IRS statistics, taxpayers who opt for direct deposit can see their money in their bank accounts within just a few days of filing their returns. In fact, 90% of taxpayers who filed for 2021 received their refunds electronically.

Beyond speed, direct deposit adds an essential layer of security. Checks lost in the mail or stolen can cause significant delays. By choosing direct deposit, you can ensure your refund goes directly into your bank account where it is safer. This is especially important nowadays, as identity theft cases continue to rise.

A bank building under a clear blue sky

How to Set Up Direct Deposit

Setting up direct deposit for your tax refund is straightforward. Here are the steps you need to take:

1. Choose Direct Deposit on Your Tax Return: When filling out your tax return, select direct deposit. Make sure to enter your bank account information accurately.

   
   

2. Provide Accurate Bank Information: Verify your bank account number and routing number to ensure your refund is deposited correctly. A simple mistake can lead to significant delays or a misdirected refund.

   
   

3. Use IRS Tools: The IRS has various tools to help you set up direct deposit. You can access helpful resources on the IRS website.

   
   

4. Stay Informed: After filing your tax return, monitor your bank account. Utilize the IRS "Where's My Refund?" tool to check the status of your refund in real time.

   
   

Following these steps will ensure a secure and efficient refund process.

What If You Prefer Paper Checks?

The transition away from paper checks will begin in 2025, giving taxpayers ample time to adjust. If you prefer paper checks, now is a good time to reconsider. Paper checks can lead to longer wait times and security risks.

It is advisable to switch to direct deposit to take advantage of faster processing times and added security. In 2022, about 4 million paper checks were reported as lost or diverted, highlighting the risks associated with this method.

If you have concerns about moving to direct deposit, you may want to consult with a tax professional or a tax preparation service like Belshaw Accounting. They can offer personalized guidance tailored to your needs.

A calculator and tax documents on a desk

Preparing for the Future of Tax Refunds

The IRS's decision to phase out paper tax refund checks is an important step toward modernizing the tax system and improving the security of refunds. As taxpayers, staying informed about these changes is vital to make the most of new options like direct deposit.

By opting for direct deposit, you benefit from faster refunds and greater security. As we approach the 2025 transition, take time to review your options. Make the necessary changes to ensure a smooth process.

For more personalized insights on navigating these changes, consider reaching out to tax professionals. Embrace this new chapter in tax refunds with confidence, knowing that the IRS is committed to making the process secure and efficient for all taxpayers.

Stay Ready for the 2025 Refund Transition

The IRS’s move toward digital refunds is a positive step but only if your financial information is accurate and up to date. Now is the time to review your banking details, confirm your records, and make sure your tax return is ready for the new system before filing season begins.

If you have questions about how this change may affect you, or need help updating your direct deposit information, Belshaw Accounting Tax and Advisory Services LLC is here to guide you every step of the way.

Our team can help you:

✅ Verify your tax and banking information

✅ Set up direct deposit properly

✅ Ensure your tax filing is secure, accurate, and compliant

📞 Contact us today at (727) 916-7410

🌐 Visit: www.belshawaccounting.com

📅 Let’s get you prepared before the April 2026 tax deadline.