- Get assistance from trained volunteers in Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. These programs help low-to-moderate-income and senior taxpayers complete their tax returns for free. Visit the IRS VITA Locator tool or call 800-906-9887 to learn more and find a local VITA center near you.
- Go to your local public library or community center. Staff may be able to provide contact information for local VITA and TCE centers or have computers you can use for free.
- Make sure you’re not withholding too much. If your tax refund is considerably large, you may be withholding too much money from your paychecks. If this is the case, you’re essentially giving the IRS an interest-free loan. You’re better off seeing that large refund as a smaller bump in each of your checks.
- Make sure you have a bank account that supports direct deposit. Electronic deposit options can drastically reduce the amount of time it takes for the IRS to process your file and release your refund, which could be just a few weeks. In addition, check cashing services charge fees. Many banks and credit unions have free account options, and they’ll set you up at no charge.
- Submit your taxes via e-file and request a direct electronic deposit. With paper returns, it can take 12 weeks before the IRS processes your file and sends you a check. With electronic filing, the IRS estimates a 21-day turnaround to send refunds.
Can You Get a Refund Anticipation Loan with Bad Credit?
If you have bad credit but need the money, you may be able to get a refund anticipation loan. There are some companies that claim to give anticipation loans without a credit check, though others will require credit checks. Some will acknowledge your bad credit but may charge higher fees as a result.
If you’re planning on getting an anticipation loan, your best bet is to simply call the tax preparer you plan on going to and ask about the details beforehand. Learn More: What is a Good Credit Score? Related Articles: How to Buy a House with Bad Credit
What are the Hidden Costs of Refund Anticipation Loans and Checks?
- E-filing fees
- Check cashing fees
- Other ‘junk fees’
- High interest rates
You won’t know the exact amount of your refund until the IRS has finalized their review of your tax forms. Although your tax forms may give you a general idea, federal and state agencies can still garnish your tax refund if you have outstanding debts, such as unpaid mandated child support or Stafford student loan payments.
T ax anticipation loans are based on your anticipated refund, not the actual amount issued from the IRS . You must pay back the entire amount you borrowed , even if your actual refund is lower than you expected. Learn More: What Are Interest Rates & How Does Interest Work?
How Do Refund Anticipation Loans Affect My Credit Score?
Whenever you receive a loan, your credit may be impacted. For tax refund anticipation loans, this depends on how the loan provider qualifies you during the application process. If there is a hard inquiry made into your credit report then your credit score may be negatively impacted. If all they do is a review, or make a soft-inquiry into your credit report, then your credit will not be impacted.
If you’re unable to repay the loan, your debt is likely to come with the high interest rates. Entering a refinance or rollover plan with your lender could put you in a cycle of debt, leaving you to pay much more than your refund was ever worth. This debt can ultimately harm your credit score. Related Articles: How Does a Debt Management Plan Affect Your Credit?