However, a recent report from Forbes notes that these same tax preparation companies may try to offer products under the guise of a “rapid refund.” These refunds, the news organization noted, are essentially loans made against a person’s anticipated return on their taxes.
“It’s an appealing idea at first blush: receive the money you’re due in minutes instead of weeks,” the report from Forbes said. “In practice, however, what are touted as repaid refunds are actually high-interest short-term loans.”
For example, H&R Block is one company that offers the rapid refunds. Forbes noted that a person expecting a $1,500 refund could get $1,427.57 right away rather than wait for their return.
However, the difference in the fee the company deducts from the return would result in an annual percentage rate of 82 percent, while people who want to receive a check rather than a prepaid card could end up paying even more. Forbes notes the company charges an even higher rate for smaller refund amounts.
Representatives from H&R Block told the news organization that its workers repeatedly use the word “loan” when suggesting the service and that some of their customers are willing to pay the fee in order to get their return earlier.
While some consumers may consider going to a professional when dealing with taxes, others should keep in mind that the Internal Revenue Service does offer some people the chance to get tax preparation advice for free, provided that they meet certain income thresholds.
Similar Posts:
Recent Comments