If you do this, a bank or lender the tax preparer is working with opens a bank account for the IRS to deposit your refund into. Once the bank or lender has the refund, it gives you a check or a pre-paid credit card for the amount of the refund, minus any fees it charges. You can also use an RAC to delay paying your tax preparation fees. This might be an expensive choice. The prepaid credit cards often have other fees, like ATM cash-withdrawal fees, ATM balance inquiry or denial fees, and over the counter withdrawal fees.
The bank or lender may claim zero liability if someone uses the card without your permission. So if your card is lost or stolen, you lose whatever remains of your tax refund. These can add up. Here are some of the fees you may be charged:. If you qualify, an IRS-certified volunteer will do your taxes for free.
Use the VITA site locator to find a site near you. Check with your local VITA site for dates and times you can get help with your taxes, or call Some firms offer refund advance loans with no fees or interest, but others may charge fees and interest. In some cases, your RAL may be loaded onto a specific prepaid card rather than being deposited into a bank account.
Ask about the fees associated with prepaid cards. Keep in mind that refund anticipation checks and refund advance loans do not mean that the IRS will issue your tax refund more quickly. With a refund anticipation check, you pay fees to delay paying tax preparation costs.
With a refund advance loan, you borrow the cash now but if charged by the provider, fees and any interest will be taken out of your tax refund.
The IRS still needs to review and process your return, so you could be responsible for RAL fees and other charges even if your refund is smaller than expected. As with any financial product or service, consider all fees, charges, and timing to help you make a financial decision that is best for your situation.
Join the conversation. Skip to main content. Filing your return The first step to obtaining your refund is filing your tax return. Using a tax preparer Another option to file your tax return is to use a commercial tax preparation firm or an individual accountant or tax preparer. Although you should review the terms of the specific RAC carefully, here is how a RAC typically works: You have a tax preparer file your tax return. A temporary bank account is set up in your name.
The refund is deposited directly to that account. Here are some ways to avoid the high costs and risks of RALs and get your tax refund back quickly at the same time:. When a taxpayer receives a RAL, the bank lends the taxpayer the amount of their tax refund less the cost of interest and fees for the loan. When the government sends the actual refund check, it is directly deposited into the bank that made the loan.
If the refund is smaller than anticipated due to deductions for items like unpaid child support or traffic tickets, the full amount of the loan must still be repaid. The cost of a RAL can vary widely and consumers should understand all the costs associated with this type of loan. RALs often carry extremely high interest rates. In addition, there are often other charges like electronic filing fees, application fees and a fee to cash the loan check.
Taxpayers should be sure to read the fine print and ask a lot of questions before signing up for a RAL. Remember that most taxpayers who file electronically receive their refunds in less than 21 days. Paying the costs associated with a RAL could be a large price to pay for getting your money a few days quicker. Before deciding on a RAL, make sure you know the answers to the following questions:.
Businesses that prepare and file an individual's tax return typically offer RALs. This could include a tax preparation business, car dealership, furniture store, or check cashing establishment. This document provides statements or interpretations of the following laws and regulations enacted as of November 3, secs.
Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec.
0コメント