When you are filing your taxes, whether by yourself or with a CPA, you may come across the option to get a split refund. From my experience as a certified public accountant in Reno, I have come across many people who do not know what a split refund is, but may benefit greatly from it.
There Are Two Types
There are two different types of split refunds. The first is the one that most people are familiar with. This type is where you want part of your tax return to go into a savings account and part of your return to go into a checking account. The second type is when a refund is split between two people.
Type One Expanded
When people chose to have their refund split between their checking account and their savings account they usually want to be safe. A common reason for doing this is that you may not want to spend your whole refund; therefore, you choose to have some of it put into savings.
Split Refund Between Two People
The second type is usually where a couple is filing together, but want the refund split between them. Usually this is because the couple is getting divorced, or is divorced, but filing for year in which they were still married. There are cases when a couple may have more benefits if they file jointly, but they want their share of the refund. As a certified public accountant, I have the ability to calculate how much is attributable to the husband and how much is attributable to the wife.
An Example Of Type Two
I had a couple who was already divorced. Last year we filed an income tax return for them. They are California residents and they were getting about $12,000 back. $7000 of the refund was attributable to the husband and so we had it direct deposited into his account. The other $5000 was attributable to the wife, who was then living in Florida, and we had it direct deposited into her account.
Before Direct Deposit
Before direct deposit the IRS would send a check with both of the spouses names on it. This requires both of the spouses to endorse the check in order to cash it. Therefore, in the example I provided, the IRS would send the check to one of the spouses. The spouse would sign it and send it to the other person. The second person would be responsible for signing the check, cashing the check, and giving their spouse their share. People in these situations would hire a certified public accountant to help in the process. The CPA would get both signatures and then cash the check and allocate the funds. This led to quit a few issues with CPAs not acting ethically.
Overall, if you want to protect your money then doing a split refund is the way to go. In addition, as an individual it is a great way to have the money put into the accounts that you want. If you are interested in getting your refund this way, you should contact a certified public accountant.