Some paid tax preparers provide a service called a “refund advance”. This means that the preparer or tax preparation company is offering a loan to you based on the amount that the tax preparer believes you will get from your refund. To provide this loan, many preparers also charge additional fees that are taken out of your refund when it comes. These fees can range wildly, can come as a surprise, and can be a significant part of your refund. This means that you are paying to have your money a little bit sooner than you would get it if you just had it directly deposited, but are actually losing a big chunk of it! These places can sometimes take $400 from your refund; we’ve even had moms work with us and tell us how they have had $1,000 taken from their refund from these tax preparers in prior years!.
All these fees are in addition to what is charged to prepare your tax return.
The worst part is that if your tax preparer doesn’t correctly calculate your refund or prepares your taxes wrong, you are still on the hook for the loan. On top of which, your credit score may be affected.
Whenever you choose a partner to help you file your tax return, make sure that the fees are clear and you see what options are available. Let’s Get Set has a flat rate and partners who can help you for free.