Paper checks are going out. Use of direct deposit and withdrawal is getting stronger.
According to a recent WSJ article, the IRS is accelerating a shift that’s been years in the making: moving away from paper checks and toward fully electronic payments.
The IRS says you will get your refund quicker if you give them your checking account information. They will send you the money electronically- much more quickly than if they print a check and mail it to you. The IRS prioritizes digital processing systems and says taxpayers choosing paper checks should expect delays of several weeks compared to electronic refunds. And, if you need to make a payment to the IRS or your state, instead of writing them a check, you can give them your checking account information and it will be done quicker. Going digital is not only quicker, but safer and easier for you.
Paper checks are expensive, slow and vulnerable. They can be lost in the mail-stolen, altered or delayed for weeks. By contrast, electronic payments, primarily direct deposits are faster, more secure, and significantly cheaper for the government to process.
The IRS has been encouraging direct deposit for years, but now the push is becoming more forceful. The federal government more broadly has signaled a goal of reducing or even eliminating paper-based payments where possible.
From the government’s perspective, this shift reflects a broader effort to modernize its financial systems. The objectives are to reduce administrative class, improve payment security, and streamline operations. Frankly, federal and state governments are catching up with the way most businesses operate.
Importantly, this is good for all of us. Direct deposit refunds are designed to be delivered in a of number weeks as opposed to months for paper. And now with interest rates at 7%, the IRS and state governments have systems in places to easily assess lots of interest and penalties for late payments. Used to be we’d send out our balance due check on April 15th and hope it didn’t get received for a week or two. That doesn’t work anymore. Online payments allow you to know that your payment has been made timely.
On top of this, you can provide both the IRS and state governments with the authority to go ahead and make automatic estimated tax payments for you for 2026. The only thing you have to do is make sure the money is in the account to cover the payment. And for our clients that’s not an issue, since if we prepare their tax returns and estimates are made, we keep track of that and remind them to make sure the money is in the account before the automatic payment comes through. Think of it- no more quarterly estimated tax checks to write, put in an envelope, attach a voucher, write out the address, put a stamp on the envelope and take it to a mail box. Priceless.
If you still want to be “old school”, i.e. get a paper check refund or write checks to the IRS or your state check, you can do it. We don’t recommend it. Refunds will come later. Payments may get lost. And worse, scammers can grab your refunds and payments in transit and leave you with a mess to clean up.
Many of us, including me, have resisted giving out our checking account information to the IRS or anyone else. I gave in two years ago. I’ve been doing everything electronically and it’s working great. No guarantee that everything will be perfect. But, it’s time to convert to digital.
Conclusion: Let’s face it. No one enjoys paying taxes. We’d rather keep our money. But it’s our civic duty, so we do it. And DWM works to make the amount you pay as small as legally possible. And, no one enjoys writing out checks to the government or watching the mail to see when their refund is received. It makes sense to pay our taxes- not only in the most efficient way, but also in the simplest, safest and fastest method. Going digital is “One less thing to worry about.”