If a tax refund is in your future, and you simply can’t wait the extra few weeks to receive your money, you’ve got some options. If you go with a tax preparer to get your tax information and documents in order, you’ll be presented with several filing choices. These choices vary in length of time you’ll receive your refund. If those options still aren’t fast enough for you, you can look into acquiring a line of credit known as a refund anticipation loan, or an RAL. These are third party consumer loans that use your expected refund amount as a basis for opening a line of credit. We’ll go over what the expected refund amount means, in detail, a little later.
Some people find themselves in need of their refund money sooner than the IRS can guarantee them getting a refund. If you’ve filed your return by putting it together yourself and popping it in the mail, it can take several weeks and even months before you see a paper check return to you. That’s if your return is even accepted by the IRS. Whether you use a service like ours, an accountant elsewhere, or you happen to file yourself, you may decide to E file your taxes. This stands for electronically file and it means that you submit your taxes, and they’ll be received by the IRS almost immediately. The length of time it takes to receive and check over your return is greatly reduced, therefore getting you your return even faster.
A great way to speed up your tax return is to sign up for direct deposit. If you have a bank account, you can fill in your bank information on your tax return. Once your return has been approved and they issue payment, it will be directly placed in your bank account. This cuts off even more time if there is no paper check cut and mailed to you.
If none of the above scenarios are going to get you your refund as quickly as you need it, you have one final option. Most tax preparation services and accountants can help you out with this, but if you haven’t already, find a tax professional for tax refund loans to see what they can do to expedite the arrival of your money. A refund anticipation loan is one your tax preparer will grant you, but please be wary of the downsides to this. You’ll get your money ASAP, but you’ll end up spending a little more for that convenience.
An RAL usually comes at a pretty High Annual Percentage Rate. Just like on a credit card, you’ll be charged interest daily, and just like credit cards, that APR can be pretty excessive. You’re probably also going to be charged a relatively hefty one-time fee for arranging the loan in the first place. To boot, you may be charged a fee based on which method of delivery you choose to receive your funds. Cutting a paper check, vs direct deposit, or even loading your money onto a debit type card are a few of the options you may be able to choose from.
If you are in fact looking to acquire a refund anticipation loan, you’ll want to ask questions regarding all of these fees and terms. You are in no way required or obligated to take out a loan if you utilize a preparer’s services, though they may offer you a discounted APR or some sort of special if you decide to go with them for your tax return.
Touching back on the expected refund amount from before, this is also an important topic to inquire about when looking to secure your loan. One of the fallbacks of utilizing these lines of credit is that they are based on the amount you or your tax preparer calculated as being your refund at tax time. Unfortunately, if the IRS declines any deductions, credits, or other ways you made claims to save on your return it could result in a smaller refund. Any personal liens, back child support, back taxes or other various sums you may owe legally or through the government can also be subtracted from any refund you may be entitled to. That means when you receive your actual tax refund, you’re already short. You’ll then have to figure out how to make up that balance to pay back your lender. In this case your lender is your tax preparer.
Hopefully you don’t find yourself in such dire need that the matter of just a few weeks makes a world of difference, and you can hold off and wait for your refund to arrive in its own due time. If not, it’s best to be as well informed about what fees and terms you may be subject to. For some people, the accumulation of fees and APR is worth it for that expedited advance of their funds; for others, it might cause them to rethink the loan application. If you have questions about the refund anticipation loan process its best to find a tax preparer to handle all your needs. They will disclose the whole process, and in most cases, you can gain access to your funds within 24 hours.
We help countless people sort out the odds and ends of their taxes to get them the best savings and most accurate and beneficial tax returns. If you get to that point and decide you need help securing a refund anticipation loan, please reach out to us right away by clicking the link below. We’re here to help you get your return filed accurately, and get your maximum refund back to you as quickly as possible!
