Tax Advance Loans On The Retreat

The number of refund anticipation loans declined 22.5% last year as consumers took advantage of cheaper and only slightly slower alternatives, NYT reports.

Taxpayers are increasingly forgoing the tax advance loans, and opting for electronic filing with direct deposit of the refund within seven to fourteen days. No fees, unlike what H&R Block charge for refund anticipation loans:

…about 3 percent for sums of $4,000 or more and as much as 12 percent for smaller sums because the base fee is usually $20 or $30. The interest rate, though it applies only until the refund arrives, would make a loan shark drool.

Don’t get a refund anticipation loan. They’re dumb. Just file electronically and get your refund direct deposited. Come to think of it, don’t go to H&R Block or JacksonHewiit. They’re ripoffs. Do TurboTax or get a real accountant. — BEN POPKEN

Tax Loans Are Losing Some Allure [NYT]
(Photo: Ben Popken)

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  1. lilmiscantberong says:

    Truer words have never been spoken. Unless of course you’re on the giving end of the loan. Does anyone have any thoughts on franchising a check cashing place?

  2. kerry says:

    Many moons ago my grandmother worked at H&R Block during tax season. She is not an accountant, they trained her to do everything. I love my grandmother very much, but I would never trust her to do my taxes.

  3. royal72 says:

    only took about a week for my refund to come in :)

  4. mac-phisto says:

    they passed a lot of new regs about this stuff for this year too, so a lot of banks may appear to be retreating, but only as long as it takes them to bypass the laws.

    it’s like dormancy fees here. it became illegal to charge a dormancy fee a couple years ago, so now banks charge an inactivity fee. same fee, different name.

  5. etinterrapax says:

    I just don’t get why people would do this. Sure, TurboTax costs something, but it’s deductible next year, and they leave no stone unturned in the deductions area. Plus, their interface is about a thousand times easier to work with than the IRS publications. Had all three of my refunds in the bank in ten days.

  6. pestie says:

    I don’t run Windows, therefore I can’t use TurboTax. I go to H&R Block because it’s convenient, and, hey, I’m willing to pay for the convenience.