Protect your refund

If you’re expecting a refund at tax time, you likely want that money as fast as you can get it. That’s why it’s a good idea to plan ahead and be ready to file as soon as you have the necessary information.

If you have your refund deposited directly into your bank account, it can come as soon as seven to 10 days after you file. There is an unfortunate exception: If you claim the Earned Income Tax Credit (EITC), your refund will be held until Feb. 15 by law, which means you likely won’t receive it until the end of the month.

That delay can make you more likely to agree to offers from a commercial tax preparer. If they say you can get your refund now, they’re talking about a refund anticipation loan. And if they say they can deduct the cost of their services from your refund, that’s a refund anticipation check. 

Both offers are short-term loans. Once you add in all the fees, you could pay up to 200% in interest. Don’t pay your preparer to get your own money – have patience.

Here are some tips to protect yourself at tax time:

• Avoid for-profit tax preparers. If you make less than $69,000, you may qualify for free filing or free tax preparation assistance. The trained volunteers who work for programs like Volunteer Income Tax Assistance (VITA) won’t offer you any sort of refund anticipation loan. Go to https://irs.treasury.gov/freetaxprep to find services near you.
• Avoid “instant refunds” and “quick cash.” According to the National Consumer Law Center, those terms are commonly used to hide the fact that you’re being offered a high-cost refund anticipation loan.
• Be ready for direct deposit. You’ll need your financial institution’s routing number (Veridian’s is 273976369) and your account number. (You can find your Veridian account numbers on your statements or in online banking under Account Details.)

For more tips on how to save and budget your expenses or to talk about your individual financial situation, fill out the form below.