Tax Refund Anticipation Loan
What is a Tax Refund Anticipation Loan?
This is a loan you get based upon the tax refund you expect to get. Generally, you pay a tax preparer to do your taxes, file the taxes electronically, and then get a loan for the amount of your expected tax refund. When your tax refund comes in, you repay the loan. The loan can come from the tax preparation company or from some other company.
How much does this kind of loan cost?
A Tax Refund Anticipation Loan can be very expensive. There are usually tax preparation fees, loan fees, and electronic filing fees. All of these fees are being charged for a loan that will probably last for only 10 days (until you get your tax refund).
What else can I do to get my refund quickly without paying so much money?
You might be eligible for free assistance in filing your taxes. VITA, a free program of the IRS, helps low income people in filling out and filing their taxes. You can get more information about VITA by calling 1-800-829-1040.
You can also file your taxes electronically and have your refund directly deposited into your bank account without getting a Tax Refund Anticipation Loan.
You may also be able to get assistance in filing your taxes if you are eligible for the Earned Income Tax Credit (EIC). See the related article to the right of this article for more information.
For more information, see Don't Pay to Borrow Your Own Money
Last revised: 2-2004
LSC Code: 1060199
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