The approaching new year means that it is time to begin thinking about filing taxes. You have seen the advertisements for the tax preparation places that offer to not only prepare your taxes, but also actually will give you your refund a lot faster than waiting for your refund from the IRS. It is important to realize that you are actually taking out a loan against your return, and you are paying high fees and interest rates in order to receive the money sooner.
Unless you are in dire need of the money (they are about to foreclose on your house type of dire) you should wait so that you will receive more money back. The rapid refund options are similar to the payday loan scams in the amount of interest that you pay, and the people who they take advantage of. It is important to educate yourself. You can receive your refund from the IRS if you e-file in about two weeks. This is not a long wait.
If you do not have a checking or savings account at a financial institution you will likely be charged a fee for cashing your refund check. The fee can slide depending on the amount of the check that you are cashing. You may want to consider opening up a savings account and depositing your check there. You will avoid the fees, and be able to access the money, as you need it.
Tax return time is a big money making time for many banks. When I worked at the bank as a teller, I always felt bad for the people who would come in with their four thousand-dollar refund loan checks. I knew that they had already lost four or five hundred dollars of their refunds in order to receive the checks. Many paid an additional four hundred dollars to cash the check with us. You could tell that many of these people needed the money. I also heard plans of how it was going to be spent all in one weekend.
If you are in a situation where you can not open a savings or checking account, you should call around and find the lowest check cashing rates that you can. You should also wait for the refund check to come by mail rather than opting for the quicker check. You will have more money in your pocket that way.
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