Read the fine print before doing anything.
At least that’s what professionals say about tax refund products like anticipation checks and refund advance loans.
This is justified by the fact that about sixteen percent of American taxpayers paid over $842 million in fees in order to obtain their refunds for 2023.
According to a recent report by the Treasure Inspector General for Tax Administration, almost 96% of those utilized a return anticipation check, or RAC.
A refund anticipation loan, or RAL, was utilized by an additional 4%.
Taxpayers who are worried about receiving their refunds sooner and don’t want to wait the customary days or weeks for the IRS to transfer the monies into their accounts and issue a check may find these goods alluring.
Furthermore, according to the agency’s analysis of their websites, not all information was readily available for consumers, even if the seven tax preparer firms that handle about 80% of all return goods are generally adhering to applicable recommendations.
It claimed that in many cases, fees and cost details for these products were not adequately disclosed, necessitating reading the fine print or turning to several pages in order to locate some pricing details.
According to the report, the RAC fees for the 2024 filing season ranged from $25 to $55. These taxpayers received an average refund of $3,841, meaning that the RAC’s cost was around 1% of their entire refund. For a fee-based RAL, the average refund was $6,696.
Additionally, the Consumer Financial Protection Bureau warned that many impose fees for out-of-network ATMs and that refunds may be issued on prepaid cards, which can have associated fees that vary greatly.
However, remember that many taxpayers are eligible for free help from IRS-certified preparers.
According to the CFPB, many individuals receive their refunds from the IRS within 10 to 21 days. You can save money by waiting a week or two.
In light of this, it would be wise for you to have some patience in order to receive your reimbursement.
Go to irs.gov and search for “Free Tax Return Preparation” to locate a volunteer in your area or online. Next, look for the Tax-Aide Locator on AARP.org. Next, prepare your taxes online at GetYourRefund.org. Finally, for help preparing your own return, visit MyFreeTaxes.com.
Stories by
EmilyAnn Jackman
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