Personal Finance

Now you can open a retirement account while you do your taxes

How to get your taxes done for free
How to get your taxes done for free

The Treasury Department wants to make it easier for taxpayers to save for retirement.

Three tax preparation software providers, TaxAct, TaxSlayer and TurboTax, will allow users to deposit their refunds this tax season directly into the government-run myRA plan, the department announced Thursday.

About 70 percent of taxpayers receive a federal refund. When users of these three software packages get a refund, they will be directed to information about the myRA and can choose to put all or some of their refund money in the account.

"Encouraging savings at tax time, when most taxpayers receive a tax refund — which for many can be the biggest check of their year — can begin to make a real difference in a family's financial situation," Bernie McKay, senior vice president of corporate affairs at Intuit, maker of TurboTax, said in a statement.

How the myRA works

A myRA, short for my Retirment Account, has no fees and account holders can only invest in Treasurys. Savers can contribute up to $5,500 per year in after-tax dollars, or $6,500 per year for people who are age 50 or older.

Once account holders save $15,000 in their myRAs, they must roll them over into Roth IRAs, where contributions, investment earnings and withdrawals are tax-free.

More than 10,000 people have opened myRAs and the average contribution is around $50 per pay period since the program's nationwide launch in November 2015, according to the Treasury Department. (President Barack Obama announced the pilot program for the myRAs in his 2014 State of the Union address.)

The myRA enrollment is dwarfed by the more than 21.1 million people who have an average balance of $100,000 in traditional and Roth IRAs, according to the Employee Benefit Research Institute.