Things to Know About Tax Refund Advances

tax return preparation

Are you impatient for tax refunds? Usually, it takes more than 21 days to get your tax refund after filing. However, tax preparers offer ways to get your tax refund advance immediately. If you cannot wait to get your tax refund, the following tips can be of help regarding this service.

Understand Types of Tax Refund Advances

You should note that there are various forms of tax refunds advances, and each has its share of advantages and disadvantages. To make a wise decision, these are some of the things to know about ways of receiving your tax refund advances.

Refund Anticipation Loan

This is a loan given against an estimated tax return. In this case, the tax preparer calculates what IRS owes you, and then they give you a loan that is a percentage of the estimated refund. In this case, the tax preparer prepares and files your returns. Also, the loan provider reviews the tax return and considers other factors such as credit score and income. You will then get a short-term loan based on their review. Your refund will be deposited in a bank account. Usually, when the refund is deposited into the account, the loan amount and other charges will be deducted.

Car Dealership Tax Refunds

Each year, the car dealers provide tax refund promotions. In this case, you are required to bring in the tax refund and use it as the down payment on the car. However, some dealers provide loans against the anticipated refund. Always ensure the dealer and the tax preparer are reputable before you can share the tax information.

Prepaid Debit Card Promotions

Nowadays, you can find tax preparers that provide tax refund promotions. In this case, the tax preparers will deposit money onto the prepaid debit or credit card. Therefore, you will get money instantly. However, if you go with this option, you should be ready to pay a lot of fees for the convenience. These include an ATM fee, initial fee, and point-of-sale transaction fee.

Review the Preparer’s Qualifications

First, you need to know that tax return preparers ought to have a PTIN. The preparer will sign the return as required by law. However, this does not mean that the preparer is responsible for the accuracy of each item on the return. The preparer ought to give a copy of your return.

Check Preparer’s History

It is a good idea to check whether the preparer you are dealing with has a good history. Also, you need to check whether the preparer has faced disciplinary actions in the past.…