Beware of tax refund anticipation loans, they cost hundreds of dollars to get your tax refund a week or two early with the fees deducted from the refunds. More and more people are taking out these loans to catch up on their ordinary bills such as rent and utilities.
Even more people are taking out these loans to have income tax returns prepared and they are paying dearly for it. The national tax preparation chains will deduct their fees from your tax refunds for a price–additional fees on top of the fees to prepare the tax returns. I have noticed fees of $300 to $400 for relatively simple tax returns this year.
Oh yes, the fees are disclosed. The tax return packet contains pages and pages of fine print disclosures. Unfortunately, the disclosures are not read carefully and all the taxpayer cares about is not having to pay for the tax return preparation out of his pocket. Wise consumers can have their tax returns prepared for free or modest $50 to 100 fees if they will shop around. Most preparers can file returns electronically and have refunds direct deposited to bank accounts in 7 to 10 days. Avoid rapid ripoff.
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