Once the end of the year comes, all of us anticipate whether we will get some money in our wallet from Uncle Sam this year. Anxious to receive a refund, consumers sometimes choose companies that promise your refund the day you go in. Many of these companies are giving consumers a "refund anticipated loan" (RAL), which comes with interest rates and additional fees to consumers. According to the Department of Agriculture, Trade and Consumer Protection, "When all the costs of an RAL are added up, you can be spending more than 10 percent of your refund just to get your money a few days earlier."
Both the State of Wisconsin and the United States government allow tax payers to e-file their taxes, therefore cutting what once was a several week wait for a refund check into just days to wait before you receive your refund in most cases. You will wait longer however if you wait to file, but it will be worth it to have that extra 10 percent in you pocket. RAL companies often charge from 70 to 700 percent APR on the loan they are making with your very own money. Most of us would not tolerate that type of interest rate from any credit card company, so don't take it from a RAL company, either.
If you decide to use a RAL company, make sure you find out: What is the interest rate? What fees will you be charged? What happens if your tax refund is lower than you thought it would be? Americans pay close to $1.4 billion in RAL costs and fees. Think about keeping your money in your pocket this tax season.
There are times when your tax refund in lower than you expected. Things like unpaid child support or traffic tickets can be deducted from your refund amount. If you borrow from a RAL, you still will owe the money they loaned you regardless of what your refund check comes back to be. Non-payment of RAL costs will hurt your credit score and open you up to garnishment of wages and possible litigation.
With e-file and direct deposit, most filers get their return in 10 days without having to pay the high costs of RALs. Also consider using a VITA (Volunteer Income Tax Assistance) site to get your taxes prepared and filed. VITA sites offer free tax preparation to low and moderate income individuals, many will e-file for you right there. To find out if there is a VITA site near you, call 1-800-422-7128.
- Sen. Jon Erpenbach, D-Waunakee, serves the 27th Senate District, which includes Green County. He can be reached at (888) 549-0027 or sen.erpenbach@legis.wisconsin.gov.
Both the State of Wisconsin and the United States government allow tax payers to e-file their taxes, therefore cutting what once was a several week wait for a refund check into just days to wait before you receive your refund in most cases. You will wait longer however if you wait to file, but it will be worth it to have that extra 10 percent in you pocket. RAL companies often charge from 70 to 700 percent APR on the loan they are making with your very own money. Most of us would not tolerate that type of interest rate from any credit card company, so don't take it from a RAL company, either.
If you decide to use a RAL company, make sure you find out: What is the interest rate? What fees will you be charged? What happens if your tax refund is lower than you thought it would be? Americans pay close to $1.4 billion in RAL costs and fees. Think about keeping your money in your pocket this tax season.
There are times when your tax refund in lower than you expected. Things like unpaid child support or traffic tickets can be deducted from your refund amount. If you borrow from a RAL, you still will owe the money they loaned you regardless of what your refund check comes back to be. Non-payment of RAL costs will hurt your credit score and open you up to garnishment of wages and possible litigation.
With e-file and direct deposit, most filers get their return in 10 days without having to pay the high costs of RALs. Also consider using a VITA (Volunteer Income Tax Assistance) site to get your taxes prepared and filed. VITA sites offer free tax preparation to low and moderate income individuals, many will e-file for you right there. To find out if there is a VITA site near you, call 1-800-422-7128.
- Sen. Jon Erpenbach, D-Waunakee, serves the 27th Senate District, which includes Green County. He can be reached at (888) 549-0027 or sen.erpenbach@legis.wisconsin.gov.
