Balance due and Overpyament

Question 1

Of the following types of IRA accounts, which is prohibited from receiving a direct deposit of a tax refund?
Traditional IRA
Roth IRA
SEP-IRA
Simple IRA

Answer 1

Refunds can be direct deposited into a Traditional IRA, Roth IRA, and SEP-IRA account. Simple IRAs are prohibited from receiving direct refund deposits.

Question 2

James files his 20X1 tax return on February 15, 20X2 and pays his entire tax liability of $2,000 on that date. When is the last day James can file a claim for refund of his $2,000?

February 15, 20X4
April 15, 20X4
February 15, 20X7
April 15, 20X5

Answer 2

James has up to three years from the date for filing his return to file a claim for refund. Returns filed prior to the due date are considered filed on the due date (April 15).

Question 3

What is the total amount of savings bonds that a taxpayer may purchase with a single tax refund?

$1,000
$5,000
$10,000
$15,000

Answer 3

A taxpayer may request up to three different savings bond registrations. Each registration must be a multiple of $50, and the total of all registrations cannot be more than $5,000 (or the taxpayer’s refund amount, whichever is smaller). The taxpayer does not need a TreasuryDirect account to purchase the bonds. IRS Form 8888.