[…] Take care of your tax refund, so it can take care of you

Ads on TV and radio may be tempting, claiming to get your tax refund money the next day, or even before you file your taxes. But these offers can be expensive. Here are some ways to make the most of your refund.

  • Use direct deposit. If possible, file your return electronically and have your refund direct-deposited into your bank or credit union account. The IRS issues most refunds within 21 days, often less—with no fees or charges. You can even keep track of your refund’s progress online.
  • Avoid tax refund advances. When a company promises a faster refund, they’re not actually getting your money from the IRS faster than you can. Instead, they’re lending you the money, and they’ll charge you for the loan. With direct deposit, you can get your full refund, usually within 21 days.
  • Pay your tax preparer up front. If you decide to use a paid tax preparer, the person may offer to take their fee out of your refund. This may seem convenient, but it can have a high cost. For example, if the fee for tax preparation is $200, they might tack on a $30 charge for the convenience of paying the fee out of your refund in a couple weeks. The $30 advance on a $200 purchase is like a loan with an annual percentage rate (APR) of 260 percent.
  • Save some of your refund. It’s free, easy, and fast to put some of your refund into savings when you file your tax return. Include your savings account information when you file yourself, or bring the information with you when you see a tax preparer. Once you’re done, check out SaveYourRefund —some nonprofits offer added incentives for saving.

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