Are you a professional who is unaware of a tax refund advance? It is a no interest loan which is repaid with tax refund. Clearly it’s a loan and not a tax refund. The loans were previously considered expensive but that is no longer the case. Since around 2012, the regulators have taken action to reduce tax preparers from offering refund anticipation loans.
Cheap ways to get tax refund
The tax refund advances are considered as an interest free and cost free loans to around $ 3,500. These are associated with that of major tax preparation companies offering taxes during the tax season to the customers who are due with a refund. The way to make it is easy and effective there are a lot more of ways and is offering with totally free loans to the tax prep customers. This is to get then in the door and collect fees on other services.
These loans truly are not from the tax preparation companies but are from banks which work with them. The customers when signs up for one of these loans, it’s the IRS which sends money to the financial institutions that are associated with tax preparations which is then disbursed to the customers in the form of funds. This is assisted to be the tax refund advance.
Those tax preparation companies are at the risk for not getting repaid for their loans. If the IRS calculates to be lowest with the refund than the tax preparer does, this will not also pursue the borrowers for loans that can’t be repaid. The companies would then pick up the costs of the services and write them off as the marketing expenses.
Eligibility for such loans
It’s true that all are not eligible for tax refund advance; this is basically an amount of cash which can be taken on a tax refund which is expectable. Indeed it’s a short term advance for which the amount of money taken from the refund as soon as it’s obtained. Its quick to obtain and would take just 24 hours or ever earlier. For receiving suitable advance, one need to make sure that the company offering loan is preparing for taxes. Other than that, you will also have to deal with tax preparation fees to make sure that you have some cash saved. Minimum amount expected to be refunded is not set which differs from company to company. These can vary between $ 200 to $ 3,500.
How much does it cost?
Many people take it wrongly thinking it to be free, but it’s not completely free as you have to deal with some costs for tax preparations. You still need to make sure that you bear cash that are needed for preparation. This depends on complexities of the returns and the tax preparation fee that may be up to few hundreds of dollars.
Risks associated
With these tax refund advance, there are some risk factors associated for getting lower refunds. If there are any issues then you have to borrow more than the amount that is received from the IRS. In this case you have to take money for repaying the loan apart from the interest and additional fees.
Where to get tax refund advance loan
The tax refund advance loans are available when a tax preparation service. The tax preparation does your tax return and the loans that you are a portion of the refund in advance. You can easily have your money in 24 hours. This IRS is then sent to actual refund to the preparer through bank account that you can setup in the name. The loan is repaid from the complete refund and then the rest of the refund is returned. Most important, there is no added work or paper work on the part.
Even there are some services offering tax advance loan without preparing taxes or are in need of copy of the tax return. These services are going to make loan based on the W-2 and that would be making a refund. The research would offer carefully and be confident in how much of the return.
The advantage of the taxes done is by the tax preparer that is making the loan. You are not stuck with a loan when you are with the tax refund loan.
