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Did you know commercial tax preparers charge on average $100 to do a tax return and then an extra $100 for a rapid refund anticipation loan also called a RAL? Stop giving your money away. Use VITA instead and imagine what you could do with an extra $200.
3 Reasons to use VITA
Refund Anticipation Loans are Dangerous
VITA allows you to get your refund in a matter of days. Refund Anticipation Loans also called RALs or Rapid Refunds promise the same thing. But did you know RALs come at a VERY high price? RALs are risky because they can have interest rates of up to 250%!
How RALs Work
Let's say you get a RAL. The tax preparer will give you your return in just a few hours or 1-2 days. This is minus fees associated with the RAL. Then the tax preparer waits for the IRS to send them your actual return. However, if there is an error on the return and the IRS does not send them the money, the tax preparer will come after you for repayment of the money they gave you, since it was an advance on your return and thus a loan. You'll not only have to repay the money, but the interest that goes along with it. Plus, you'll still have to find a way to correct your tax return with the IRS. It's not worth the risk or the trouble. Use VITA Instead!
2
Fact
Unethical tax preparers, offering RALs, may forget to tell you about the Earned Income Tax Credit and the Child Tax Credit, which is money available to individuals and families who have children and/or who earn below a certain amount of money.
RALs are often advertised at places like car dealers or furniture stores. They then encourage you to use your refund on an
in-store purchase.
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