In case you are thinking about using an advertised service that provides “instant tax refunds” or “quick money,” you might like to reconsider.
When the government sends your actual refund check, it’s direct deposited into the bank that made the credit. Besides losing a chunk of your refund to application and check cashing fees, the loan you get may carry an exceptionally high interest rate ranging from 70% to 700%. Americans spend nearly $1.4 billion in refund anticipation loan expenses (RAL expenses) and charges each and every year. That quick tax refund might end up being higher priced than waiting for your check. If you cannot repay your loan it can hurt your credit scoring and you may face litigation and garnishment of wages. With these services, a tax preparer will determine your potential tax refund and give you a loan for that amount, less the expense of interest and loan fees.
You may have your refund direct deposited into your bank account within days if there are free-of-charge tax preparation sites across the state that help low-income residents, seniors, individuals with disabilities and veterans with e-filing their taxes. When the government deducts costs like unpaid child support or traffic tickets from your tax return, you may not obtain the refund you expected and will also be required to spend the bank the difference at those high-interest rates. If a W-2 is waiting inside your mailbox, you most likely wish to get your hands on your tax refund as quickly as possible. If you would like to get your refund quickly, we suggest you e-file your taxes. A fast tax refund might sound tempting however it will cost you a lot in fees and interest.
By avoiding these “quick cash” RAL services and thinking ahead for their returns, taxpayers could get the full amount they are due and not need to face the threat of painful interest rates.
To steer clear of the high expense and perils associated with RALs, the Wisconsin Department of Agriculture, Trade and Consumer Protection and also the Wisconsin Department of Revenue offer the following guidance:
» Avoid check cashers – In the event you receive a tax refund check instead of a direct deposit, cash the check at the bank that holds your checking account to avoid hefty check cashing charges.
» E-file your return with direct deposit – E-file your tax statements and have the tax refund deposited directly into your bank account.
» Open a banking account if you don’t currently have one – Taxpayers without a checking account ought to open one in a nearby bank so that they are able to have their refund direct deposited. Usually a totally free account may be opened with less than a $5 or $10 deposit.
» Strategy in advance – Direct deposit tax refunds might take as few as seven days for that refund to be deposited in to the taxpayer’s account. If you have an urgent bill to pay, tell your creditor that you’ve e-filed your return and that you expect your refund soon.
If you have questions regarding taxes or would like information, we suggest taking advantage of the help that tax professionals are offering. At Karla Dennis And Associates, Inc.™ we can determine several tax planning strategies for you to help you get a bigger tax refund. Contact us now and let us help you get your tax planning set up for the future.