Are Refund Anticipated Loans Good or Bad?

more+
less-

There has always been a debate surrounding Refund Anticipated Loans or RALs. Refund Anticipated Loans are usually taken up by the lower income bracket taxpayers who need or want their tax refunds quickly. Tax preparers, taking advantage of this demand, would arrange for RALs to give immediate cash advances to those who cannot wait for their refunds. Naturally, the amount of the loans is limited by the amount of refunds the taxpayers are getting. And the taxpayer on the other hand, would hand over rights to their refunds to the tax preparers. Needless to say, the loans come at high interest rates and fees despite the low risk to the lenders.

Essentially, with Refund Anticipated Loans, you are paying interest to borrow money that is already yours, albeit just for a short term, usually for two to four weeks. Nevertheless, many tax preparers promote the RALs with a lot of hype and make it seem like such a good deal.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×