Be Careful With Instant Tax Refunds

There are many tax preparation services that will offer you some sort of instant refund to gain your attention and business.

Ohio State University Consumer Policy Expert Lauren Jones said many people who are due a refund get excited and want their money immediately, but that can lead to major costs.

“Rather than owing any money for preparing your taxes you get the value of your refund now and once the government pays your refund [the preparer] will take that money and subtract what you owe for having down your taxes along with an interest rate.”

And those interest rates can be particularly high and Jones said with most of the work being done online now, you might need to wait long for your refund.

“If the refund preparer is charging a lot for the service, you can end up paying a huge interest rate on a very short-term loan just to have the cost of your tax preparation paid up front.”

Before deciding on how to receive any tax refund, make sure to ask questions on any sorts of fees or interest rates that might applied.