Free ‘Tax Refund Loans: Are They Really Free?

 

Tax refund loans, also called tax refunds, are funds offered by the country’s three largest tax preparation services – H&R Block, Jackson Hewitt and Liberty Tax Service – to their in-person (not oTitus Groanine) tax-paying customers. In contrast to the tax refund anticipation loans from the past, which had high interest rates and fees and were concluded by the government, the new repayment loans do not charge interest or costs. Taxpayers can borrow a maximum of $ 1, 300, depending on the company, the expected repayment amount, the eligibility criteria and the acceptance.

Types of tax-refunded loans and their associated costs

Types of tax-refunded loans and their associated costs

GewooTitus Groanijk takes around 24 hours to get the money, while it can take up to 21 days to receive a tax refund through a direct deposit from the bank. Internal Revenue Service (IRS). So why wouldn’t you want one?

Here is a look at whether there are strings attached to these “non-strict” loans, which can be loss leaders that are meant to bring things to tax preparers in the era of Turbo Tax. The refund loan from each company is similar, but there are differences in the fine print. Read below for the most important details you need to know. (For more information, see 5 smart ways to use your tax refund .)

H&R Block

The company offers refunds of $ 500, $ 750 or $ 1, 250 after you have submitted your taxes to a participating H&R Block office (it does not apply to use of the oTitus Groanine software from H&R Block) . In most cases, approved customers can receive their money on the same day that they request a refund. You receive the money on an H&R Block Emerald Prepaid MasterCard, a prepaid prepaid card with which you can pay bills, make purchases or receive money. The costs associated with this card are:

  • Up to $ 4.95 (charged by the store location, not the Emerald Card) to reload the card with cash
  • 2% for directly financing your card with a pre-printed looTitus Groanijst or government test and 4% for all other checks (also not taxed by the emerald Card)
  • $ 3 per ATM withdrawal, plus a surcharge for non-network ATMs
  • $ 1.50 per ATM balance survey
  • $ 1.50 per refused ATM transaction
  • $ 4.95 inactivity costs per month after two months without credit or debit activity

An H&R Block spokesperson did not disclose the average cost to show the taxpayer’s incoming store proposal, but said the company could estimate the cost of preparing the tax for the customer prior to completing the return. The final reimbursement depends on the complexity and other factors. H&R Block offers free federal filing in its offices for taxpayers whose situations are eligible to use the simple form 1040EZ.

Customers who cannot pay H&R Block tax returns in advance can pay the company through an FDIC insured repayment account from BofI Federal Bank. Customers who set up a reversal transfer will receive their repayment loan from that account after their refund has been received. Any remaining tax refund can be loaded onto the Emerald card, deposited directly into an existing bank account or, for an additional $ 25, issued as a paper check. Setting up a refund transfer account costs $ 34.95. A refund transfer account is not required for customers who pay their tax return to H&R Block at the time of filing. (For more withholding tax, see: good for the government, bad for taxpayers .)

 

 

Refund advances of up to $ 300 are available after you have submitted your taxes to a participating Jackson’s Hewitt Office. You will receive the money within an hour, plus a $ 50 bonus, if you choose to deposit it on an American Express Serve Card, a rechargeable prepaid card with a monthly fee of $ 3 but no reimbursement for receiving direct deposits, adding money from a bank account, paying bills oTitus Groanine or withdrawing money from in-network ATMs (cash withdrawals from non-network ATMs are $ 3, 50 plus the cost of ATMs). Cash reloads costs up to $ 3.95 depending on the seller’s rate.

Customers can also receive refund advances via direct deposit on the next business day. Customers may be eligible to borrow $ 200 to $ 400 even before filing their taxes by introducing a payment slip or other proof of income. This initial loan will be deducted from the total repayment advance that Jackson Hewitt offers once your tax return is completed.

Customers who cannot prepay the tax preparation costs of Jackson Hewitt can pay these through Assisted Refund. Their reimbursement will be deposited into a temporary, FDIC-insured bank account of Republic Bank & Trust Company or Civista Bank, after which it can be transferred to an American Express Serve Card, a Walmart MoneyCard, another prepaid card or a persoTitus Groanijke bank account. The costs associated with this account are not disclosed oTitus Groanine and a company spokesperson has refused to provide it. The spokesperson said the company’s professional tax advice starts at $ 48, and the company’s average professional tax preparation fee is around $ 230, which is the same as last year.

 

Liberty Tax Service

 

Liberty Tax Service

Refund advances of $ 500 to $ 1, 300, known as Easy Advance, can be made after you have submitted your taxes to a participating Liberty Tax office. Liberty offers the possibility to receive your tax refund on a NetSpend Liberty Tax Prepaid MasterCard, the costs of which are usually low and reasonable for a prepaid card. (For more information, see How do NetSpend cards work? And How NetSpend works and makes money .) Customers typically receive their money on a NetSpend card within 24 hours after the IRS has accepted their return tax; it may take longer for your bank deposits to be processed. The offer is available up to and including 28 February.

Customers who cannot prepay Liberty’s tax preparation costs can pay through a FDIC insured transfer account from River City Bank Tax Division or Republic Bank & Trust Company. Customers who set up a chargeback transfer will be reimbursed from that account after their refund has been made receive. Your remaining tax refund can be loaded onto the NetSpend prepaid card, deposited directly into an existing bank account, issued as a paper check or for an amount of $ 10, issued as Walmart Direct2Cash, a way for customers to get their cash refund in a Walmart shop to avoid potentially higher check cashing costs.

Liberty’s website says that additional costs apply to certain payouts, but does not provide further details. There may be costs associated with an account for transferring a refund. Liberty Tax Service did not respond to a request for additional information about these costs.

Although tax refund loans are completely free, taxpayers who sign up for this may also have to pay VAT preparation fees (unless they qualify for free tax preparation). They can also pay costs associated with borrowing money to pay for those preparation costs, as well as costs associated with prepaid cards on which refund loans and repayments themselves can be charged.

These fees may be worthwhile for some taxpayers, who would otherwise have to turn to more expensive borrowing options. Other taxpayers who need cash to transfer them before their money returns can do better by borrowing from sources other than getting one of these loans. (See The VAT deduction system for more.)