IRS Tax Refunds Anticipation Loans Liberty Tax Anthony Alarcon

It’s tax time and many of us already have plans for our tax refund.  The money holds the promise of paying off bills, recovering from excess Christmas spending or getting yourself a treat.  Of course you want the money as fast as possible right. So you go to one of the tax preparation store fronts or kiosk plop down your W2’s find out what you got coming and sign up for the quick loan and get your money tomorrow  what a great deal.   No this is one of the worst rip offs you can submit to. 

It matters not weather you are paying them five dollars or fifty five percent it is an unnecessary expense.  You are paying them a fee to give you your money a few days early and if for any reason there is a problem you still will not get your money until the IRS releases it.  In most cases you have already over paid to get a 1040ez form filled out with some companies charging $30.00 or more per form to complete your taxes.  If you qualify to get the earned income credit that automatically adds at least two forms to your file.

The refund anticipation loans come with a number of fees.  The tax preparation  company gets paid, there is a middle company that manages the transaction between the IRS the Bank and you, and the bank gets paid for the short term loan.  The charges are high and you seldom read the fine print.  The worst thing that could happen is if for some reason there is an attachment levied on your refund so you do not get your refund.  Perhaps student loans, someone with a lien, a past tax debt or even parking tickets can swoop in and take all or part of your refund.  The loan is usually granted  on acceptance of you tax form by the IRS this only means the information was accepted by them.  If for any reason there is a problem the terms of you new loan will blow your mind.  These companies have harsh collection process and will place a judgment against you with little hesitation.  

What you should do is:  If you do the basic1040 ez or 1040 a and take standard deductions, do your taxes yourself.  Use the free or low cost options online or the free tax preparation programs go to for local listings. If you use any of these options you will get your refund in about eight days from the date of your form being accepted by the IRS. That’s eight days and you will probably save yourself a few hundred dollars that’s not a bad trade off  I am sure you can put that money to good use.  If you have to mail your forms it may take as long as five weeks but you would only do that if none of the other options are available to you.  If you use one of the tax preparation services because you are uncomfortable doing your own taxes that’s OK, make certain that you have the charges disclosed before you begin the process and if you are OK then proceed.  Just say no the anticipation loan.

In these economic times every penny counts don’t throw away your money for a quick fix it is not worth it. This year do something different save some of it.