It is tax season and plenty of people want to get their hands on your money!
The set up is simple. Your tax preparer offers to give access to your tax refund on the spot or at least faster than Uncles Sam can. Sound like a good deal, right? Get money now instead of waiting a couple of weeks for the Internal Revenue Service and State to process your refund. Refund anticipation Loans are the widely known example, but Federal regulations have essentially eliminated such loans.Unfortunately, the costs of such products can be high. Therefore, before taking a loan from your tax prepare ask for all the fees you will be charged.
While the aforementioned Refund Anticipation Loan is dead, tax preparers are hard at work at a similar product provided by entities not covered by the Federal Regulations. According to MSN Money, Liberty Tax Service may be offering such a service this tax season. See here. Therefore, tax payers should be vigilant and make sure they fully understand the costs of such products.
Pre-paid cards are another tool that tax preparers are selling. Similarly, these pre-paid cards have fees which are crazy to me because IT’S YOUR MONEY! These fees include atm fees, check writing fees and monthly maintenance fees. Why would anyone agree to pay an atm fee to access their refund? Why not deposit the funds into you r bank account and withdraw the money from your bank’s atm!
Unless it’s an emergency its better for your wallet if you receive YOUR REFUND DIRECTLY FROM THE GOVERNMENT! Why share your refund with tax preparers and their banks.
Posted by Joseph K. Githuku.