Waiting is for schlubs. At least that’s the message retail tax preparers are broadcasting with tax refund loans. Instead of waiting two to three weeks for your tax refund, it’s now possible to get a loan for the same amount on the day you file.
Or I should say, roughly the same amount. Tax refund loans have strings attached:
- Origination fees and interest cut into the refund amount.
- The extremely short-term nature of these loans obscures annual percentage rates of over 100%.
- The fine print is difficult to understand.
- Successful tax refund loan repayment is not reported to credit agencies.
On the other hand, tax refund loans can be used responsibly. For example, it’s possible that the interest and fees on a tax refund loan may be less than the interest on an existing larger loan. In that case, it would make sense to take the loan and apply it to the principle of the other debt.
Another positive is that tax refund loans are accessible to people with all different credit scores, though interest rates vary according to score. So, business as usual.
Tax Day this year is on April 18, due to Emancipation Day being celebrated in Washington, DC. Both Connecticut and New York give you the ability to ask for an extension — though if you follow my advice and get a CPA, you won’t need to worry about a lot of these things.
And just when you thought you were safe.…estimated taxes for Q1 of 2022 are also due on April 18th.
Even with your accountant helping you, getting your document-based act together always sounds easier than it really is. That’s where JHA steps up to help you. Our bookkeeping clients don’t need to lift a finger once the initial set up is done. If you’d like to always have the documents you need, contact us to learn more.
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