If you pay someone to prepare your tax return, avoid taking out refund anticipation loan. A refund anticipation loan is where you get your tax refund very rapidly, usually within one to two days of filing. You are actually taking out a loan, with your tax refund from the IRS as the collateral. While it is nice to have your money quickly, the fees and interest make these loans a bad deal.
You will be better off making adjustments to your W-4 with your employer so that you get more money throughout the year. Obviously you will get a smaller refund, but you will have your money in your own hands sooner, without paying interest or fees. Go to www.irs.gov to make out a new W-4, which will adjust your federal withholding. You can also adjust your state withholding as well.
Sunday, March 16, 2008
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