If you’re in a hurry to get your refund back, many tax preparers offer a Refund Anticipation Check. It allows you to deduct your tax-prep fees from the refund, and get the money right away
Some tax preparers are offering these refund anticipation checks as a sort-of cash advance. They’re especially popular among low-income families anxious for their piece of the Earned Income Tax Credit, the government’s $65 billion cash benefit program.
But, tax regulators say some people aren’t fully informed about fees connected with this cash advance. According to Earnings Reports, refund anticipation checks and prepaid cards make up 10% of H&R Block’s revenue, and 20% at Liberty Tax.
H&R Block says they are convenient options and that customers are provided with all the information they need to make these decisions.
WWLP spoke with a couple whose children have taken advantage of this option.
“They’ve done it in the past. Of course, they were young, got the money right away, got to use it right away. So they had no problems whatsoever with it,” said Jean Daley of South Hadley.
Many smaller accounting firms do not offer the cash advance option. The IRS is concerned about the wide range in filing fees that each tax preparer charges. They’re currently pushing Congress for authority to regulate the tax preparation industry.
Like most things, you’re advised to do your research before filing your taxes.