Rapidly Diminishing Tax Refund Loans

tax refund loans Are the bills hitting the mailbox from your holiday hangover?

Tax preparers are banking on the folks who paid for their Christmas giftswith their tax return . Hence, they created the refund anticipation loan.

Instant cash with the benefit of having a professionally prepared tax return sounds like a reasonable proposition, Now this is what I call American ingenuity -- NOT.

Unfortunately, you will pay a whole lot more getting your tax refund now rather than waiting a few days later. According to the Consumer Federation of America the average cost of a refund anticipation loan can range from 40 percent to as high as 700 percent; in 2004 Americans spent more than $1.6 billion incurring these fees.

Finally, the Internal Revenue Service is seeking comments from the public and is considering outlawing these types of loans.

If you need your money quickly, you don't have to pay an arm and leg to get it. Here's how.

File on the IRS Web site. You can prepare your taxes and file electronically on the Internal Revenue Web site for free using Freefile if you earn less than $54,000 a year. More than 57 million Americans are eligible and can receive a return and have it deposited in a bank account in as little as a week if there are no complications. Visit www.irs.gov

Use tax software Purchase a software program and plug in the numbers and prepare the return yourself. Once completed you have the option of filing with the IRS electronically and your refund is then deposited to your bank account.

Have your tax preparer do it electonically. trusted accountant or tax preparer can also file your return electronically and have your return directed to your bank using the IRS E-file procedure that is detailed on the tax return document.

Don't allow someone else to charge you a fee to have access to your own money. Sometimes convenience is too expensive.

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