The real cost of instant tax refunds - WAOW - Newsline 9, Wausau News, Weather, Sports

The real cost of instant tax refunds


"It's the time of year when we all start thinking about filing our taxes.. and hopefully getting a nice return.

And when tax preparers offer "rapid refunds" it can be pretty tempting to take the cash.. but you may want to hold off.

Often times those rapid refunds are actually high-interest loans.. and the better business bureau warns they deliver only slightly faster refunds than the IRS.

Refund anticipation loans are similar to payday loans: They're short-term loans with high interest rates that can range from 50 to 500 percent.

In some cases, they even have hidden administrative fees.

If the tax prepare makes a mistake in calculating your refund, borrowers could be required to pay fines and fees, too.

The IRS usually delivers refunds in as few as 10 days after a consumer files a tax return, if the consumer files the return electronically and takes the refund by direct deposit to a bank account.

The speed makes most refund loans unnecessary.

And if you don't have a bank account this year, the IRS has another option for refunds: a prepaid debit card.

The IRS reports the cards arrive faster than checks and may allow consumers to avoid check-cashing fees.

This tax season I'll be researching more tax refund tips and keeping you updated.

You can find this information and more on our web site... just go to WAOW dot com slash consumer watch.

In the studio I'm Kristen Rietz for Newsline 9."

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