Alternatives to a Refund Anticipation Loan
Before using a Refund Anticipation Loan this tax season, consider these alternatives to help you avoid triple-digit interest rates, unexpected "administrative" fees, and ultimately keep more of your refund:
1. File Your Taxes Electronically
According to the IRS more than 90 million taxpayers used their e-file service in 2008 and many more are expected to use it this upcoming tax season. By filing your taxes electronically not only will you get your refund quicker, but you may also save yourself a lot of money by filing your taxes for free.
2. Use the Direct Deposit Option
While filing your taxes electronically, opt to have the IRS deposit your refund directly into your checking account. In most cases, a direct deposit tax refund takes about two weeks, practically eliminating the need of a refund anticipation loan, which may only speed up the process for a few days. If you don't have a checking account yet, open one at your nearest bank or credit union before preparing your taxes.
3. Prepare Your Taxes at a VITA or TCE Site
VITA and TCE are IRS programs that offer free tax help to low- to moderate-income people and the elderly. By preparing your taxes at one of their sites you save yourself the hassle of any unexpected administrative fees and keep more of your hard-earned money. To locate the nearest VITA or TCE site, simply call 1-800-829-1040.
