If you are anything like me, I bet you are still returning holiday gifts, so to look at the calendar and see that its already tax season was a little mind-blowing to me. Tax time already, how could that be, I just finally put away the decorations.
Although some folks are anxious about what they might owe, there are some of you who are expecting a refund. As much as you might be looking forward to the extra cushion in your wallet, we want you to be educated about some tax products that might not be the best solution for receiving your refund.
I’m sure you have seen commercials on TV advertising refund anticipation loans, sometimes calls RALs. Beware – because RALS can carry a high price for you, the consumer.
RALs are short-term cash advances against your anticipated income tax refund. You may get your refund a little bit earlier, but you will get a lot less money. These loans are offered at very high interest rates. Also, they speed up the refund process by as little as one week, compared to what consumers can expect by filing online and having their refunds deposited directly into their banking accounts.
According to consumer groups here are some tips that can help you when filing your taxes.
Be patient. If you file your taxes electronically and have your refund directly deposited into your bank account, you will get your refund in just approximately two weeks.
If you are considering a RAL, make sure the company offering the RAL clearly explains all the free options to get your refund. Look for a company that has upfront, clear, and simple disclosure of the loan costs. Beware of companies that call RAL’s a “refund” or “instant money.” It’s not; it’s a loan.
Watch out for companies that charge extra for cashing your tax refund check.
Also keep in mind about places that offer free tax-preparation so you are not pressured to take a RAL, such as AARP Tax-Aide. Find a location near you or call 1-888-227-7669.
Now that you have all the information to be a fraud fighter, help someone else and pass this information along, so we can keep communities safe and secure in their financial future.