Best to Avoid Tax Refund Anticipated Loans

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Many taxpayers who want to get their tax refunds early resort to taking up Refund Anticipated Loans or RALs from tax preparers. These refunds come in the form of checks or gift debit cards. Similar to payday loans, RALs are short-term loans with high interest rates. And if the tax preparer computes your refund amount erroneously, you could end up paying more in the form of fnes. For instance it your refund amount comes up to less than the loan you take, you would have to pay the difference plus fees and fines.

In addition, there will be an administrative fee as well. The usual interest rates charged are between 50 to sometimes 500%. This makes RALs hardly worth the while unless you are in very dire need of urgent funds. After all, the RALs normally arrive only a short while before the IRS refund itself in most cases. These days, you can receive your refund in as few as 10 days if you fle your return electronically and if you opt for direct deposit of your refund into your bank account.

Please see full article below for more information.

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Published In: Consumer Protection Updates, Finance & Banking Updates, Tax Updates

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

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