Alternatives to a Refund Anticipation Loan

Taxpayers may be tempted to use a refund anticipation loan to get their refund faster. But before using an instant refund this tax season, consider these alternatives to help you avoid triple-digit interest rates, unexpected "administrative" fees, and ultimately keep more of your refund this year:

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

When you file your taxes electronically this year, 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.  New for 2011, U.S. Treasury Department recently invited 600,000 low and moderate income tax filers to participate in a pilot program that will deliver tax refunds through prepaid debit cards.

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.  The majority of these sites will stay open right up to the last possible moment, so call 1-800-829-1040 today to locate the nearest VITA or TCE site and make your appointment.