Article Advise

submitted: Aug 13th 2008 | by: WilliamBlake | Total views: 3 | Word Count: 525 | |

During tax season, there is much talk of rapid refunds. Such refunds are indeed rapid, putting money in your hands almost instantly. But they come with some undesirable results as well. This article will present all the details of rapid refunds so that you can make an informed decision.

Based off of what commercials, rapid refunds are a great way to get your tax refund in cash ultra-fast in exchange for a meager fee. Although getting money that quickly feels nice, how necessary is it?

Depending on the circumstances, some families live from paycheck to paycheck. At tax time, the big bolus of cash is a welcome sight when there are bills to pay and mouths to feed. Well known tax centers like Jackson-Hewitt or H&R Block can file your tax forms and sign you up for the rapid refund program.

Although it seems so easy on the surface, rapid refunds are more complicated than that. In reality, they are refund anticipation loans, abbreviated RAL's. Just all loans, they bring with them interest and finance charges.

Rapid refund sounds a lot nicer than refund anticipation loan, since few people are really interested in being tied to a loan. Rapid refunds, thus, are often a source of confusion, since they are rarely equated with what they actually are, loans.

The name has been changed because many people, after enrolling in a rapid refund program, felt that they had been tricked into accepting a loan they didn't want by false advertising. When this type of loan was originally offered, it was marketed mostly to individuals earning a lower income who were eligible for the earned income tax credit, or EITC, and the interest rate charged on it was outrageously high.

A family who really needed their tax refund right away was able to get it as a result of the rapid refund program. But, if the person applying for the rapid refund was not aware of the high charges they would be charged on the loan, and even if they paid as soon as possible, the extra they had to pay because of interest on their refund of a few thousand dollars was astronomical.

What was a little known fact is that electronic filing can have a refund in the hand of the taxpayer in two weeks. To me, that's fast. I'm used to waiting for months to see my refund. If you don't have a computer, a tax preparer can file it for you with the IRS website.

If you don't have a bank account, electronic filing is still possible, you will just receive a check by mail instead. In order to get your money even faster through direct deposit, you can open an account at a credit union associated with your church or workplace. These accounts tend to be easy to open and require extremely low minimum balances, sometimes just twenty-five dollars.

To avoid charges associated with refund anticipation loans, review all your options when it comes to getting your tax refund fast.

About the Author

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