IRS to Phase Out Paper Tax Refund Checks

The IRS has announced a major change: starting September 30, 2025, paper refund checks for individual taxpayers will be phased out as part of a nationwide transition to electronic payments. This move, required under Executive Order 14247, is designed to improve security, speed up refunds, and reduce costs.

At Velin & Associates, Inc., we’re committed to helping our clients—from YouTubers, Shopify sellers, Amazon business owners, doctors, dentists, filmmakers, and TikTokers to high net worth individuals—understand how these changes affect them and how to prepare.

Why Is the IRS Eliminating Paper Checks?

The IRS is making this change for three key reasons:

1. Security – Paper checks are 16 times more likely to be lost, stolen, or delayed compared to electronic payments. Direct deposit reduces fraud and ensures funds reach the right account quickly.
2. Faster Refunds – File electronically and choose direct deposit, and you can receive your refund in 21 days or less. Paper checks can take six weeks or longer to arrive by mail.
3. Lower Costs – Electronic payments cost the government (and taxpayers) significantly less to process than paper checks.

What This Means for Individual Taxpayers

• Filing stays the same – You’ll continue to file your return as you always have, whether electronically or by paper.
• Refunds go digital – Most refunds will now be issued by direct deposit or other secure electronic methods.
• Help for the unbanked – If you don’t have a bank account, the IRS will offer options such as prepaid debit cards or digital wallets, with limited exceptions for paper checks.
• Act now – Make sure you know your bank routing and account number or consider opening a free or low-cost checking account.

Who Is Affected the Most?

While 93% of 2025 refunds were already sent via direct deposit, certain groups may be impacted more directly:

• Freelancers and Creators (YouTubers, TikTokers, Filmmakers, Online Creators): If you’re filing for the first time or don’t have a consistent banking setup, now’s the time to update your refund preferences.

For example, if you are a YouTuber in Los Angeles and you file your 2025 return electronically on February 1, 2026, with direct deposit, you could receive your refund by February 20 instead of waiting until mid-March for a paper check.

• E-Commerce Sellers (Amazon Business Owners, Shopify Store Owners, Online Commerce Professionals): You’re already used to digital transactions. Make sure your tax refunds are just as seamless by linking a dedicated business or personal account.

For example, if you are an Amazon Business Owner who prefers your refund to go into the same account used for quarterly tax payments, you’ll need to confirm your banking details with the IRS so your refund is deposited correctly.

• Doctors, Dentists, and Medical Practice Owners: If you run a professional practice and typically separate personal and business finances, be sure your personal refund account is updated with the IRS.

For example, if you are a Dentist with a private practice who previously had refunds mailed to your office address, you’ll now need to provide your direct deposit information to avoid refund delays.

• High Net Worth Individuals: Even if refunds are relatively smaller compared to your tax liability, direct deposit eliminates delays or risks of lost checks, ensuring smoother cash flow management.

Next Steps

• For now: If you’re still filing your 2024 tax return on extension (due before Dec. 31, 2025), nothing changes — you may still request a paper check.
• Starting Sept. 30, 2025: Refunds will be electronic-only, with limited exceptions.
• Looking ahead: Executive Order 14247 also applies to payments made to the IRS. While details aren’t finalized, we expect further moves toward digital payment systems in the near future.

Final Thoughts

This change represents a significant step toward a fully digital tax system. For most taxpayers, it means faster, safer refunds — but for those still relying on paper checks, it’s time to take action.

At Velin & Associates, Inc., we help individuals and businesses — from creators and e-commerce sellers to doctors, dentists, and high net worth individuals — stay ahead of IRS changes. Don’t wait until the last minute: ensure your banking details are updated before the 2026 filing season begins.

For more information about our tax planning services, contact us today: visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org