Tax Refund Loans
Tax Refund Loans
A tax refund anticipation loan is tempting, especially if your business is experiencing cash flow issues and you need cash quickly. But, as a business financing instrument, tax refund loans are very costly. In fact, you do better to simply get an advance on a high-interest business credit card.
At tax time, the ads sound enticing. Fast Cash. Express Money. Instant Refunds.
Tax refund companies promise to get you that tax refund in just a few days or even on the spot.
Who wants to wait ten whole days or longer for a refund from the IRS?
You do.
According to the National Consumer Law Center (NCLC), firms that offer instant tax refunds are really peddling loans at rates of 60 to 700 percent interest.
Instead of signing away 10 percent or more of their hard-earned tax refunds, NCLC advises taxpayers to file their tax returns electronically and wait the two weeks that it takes to produce a refund. Paying a loan shark, even a speedy one, is never cost effective.
Start Your Taxes Sooner, Rather Than Later
Remember, it's never too early to start working on your taxes. If you start organizing receipts and records now, you'll be set to prepare your return as soon as your W-2s arrive.
How is that a benefit, you ask? Well, if you file in February, you'll most likely have your refund check in hand well before someone who files on April 15 and coughs up the cash for an immediate refund.
Top 5 Errors on Tax Returns
And speaking of taxes…The IRS reports that the most common errors on tax returns are also the simplest to fix. Here are the top five reasons that tax forms get returned:
Incorrect or missing Social Security numbers
Incorrect amount of tax entered from the tax tables
Computational errors in figuring out Earned Income Credit for dependents
Withholding or estimated tax payments entered on the wrong line
Simple math errors in adding and subtracting amounts
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Tax Refund Loans
... make about half, so be aware that a preparer might try to talk you into a tax refund loan. If you do not want one, then do not allow yourself to be coaxed into it. Tax refund loans have been the target of a lot of criticism; after all, it only makes sense that it generally would be low income individuals ...
... in two weeks or less by using electronic filing and having refunds deposited into your own bank account," said Jean Ann Fox, director of consumer protection for CFA. The study said more consumers seem to realize that, because the number of such loans dropped by 22 percent between 2004 and 2005. But they ...
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... for repairing your credit. Most debt consolidation companies drain the restricting resources by charging fees for the service. Many of the debt consolidation companies will pay the creditors minimal balance and put your assets at risk. Unfortunately most of the debt consolidation companies will charge ...
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