Tax Returns in December?

Alexandra,

I agree with you. It's nothing more than a loan, and very similar to a PDL - you pay it back as soon as you get paid. I realize, too, that sometimes the circumstances are extreme and people need to pay off a bill immediately; but to get this money which, as you said, you do pay for services on, just because you don't want to wait a little longer to get it and then to blow it is bizarre.

I just read your blog about the December tax return and H & R block has been offering this since mid-November b/c I work with a girl that went and had it done. She took in her most recent paystub and walked out with a $1500 debit card. From my understanding, it is some type of refund anticipation loan and they do check your credit history. My co-worker also told me that the loan from H & R Block is offered through HSBC bank, and once she get's her actual W2's, she has to go back and file her taxes with H & R Block, so she can receive the rest of her income tax refund, so I'm assuming that they only give so much of your refund right now b/c she told me that she usually get's $4000 back every year.

But how much are they charging her for this service?

The loans generally last about 10 days before the refund arrives and can carry annualized interest rates as high as 700 percent. WOW

I saw that ad too, and all I could think was ...

"good old H & R Blockhead"

I have to thank them though, because due to their incompetence and screw-ups, my entire family and some friends now ask ME to do their taxes for them. I don't charge $200 - $400 to do it (like H&R routinely does), they're done within a couple of hours, and I let them sit right here and look at the computer when I do it, so they see EVERYTHING that's being done, and if they don't understand, I explain it.

What they are doing is a big problem - your last paystub may not accurately reflect what shows up on your W-2 when you get it....

A few years ago I got one of those Refund anticipation loans from H&R Block. I got my money in 2 days, they deposited it into my account. I wasn't dissatisfied with the whole deal, I really needed the money; but it did cost me $300. I'm glad it's something I don't have to do anymore.

Wow, $300 for a RAF...that's incredible. At one time I considered doing returns for H&R during tax season to earn extra money, but once I started hearing the horror stories from friends and family, I changed my mind. I don't want to be part of that organization at all.

H&R has been under a lot of fire recently, especially with their RALs. I didn't have a problem, but I've read about some lawsuits from people who have!

I personally know of people who have been charged over $400 to have their taxes filed because of "special circumstances that required extra work" on H&R's part.

Family members have had tax returns screwed up three years in a row before coming to me for help with it. (The IRS found the errors and returned the tax return to H&R for correction before issuing the refund in one case, and in the other, H&R screwed up the figures on the return, causing a larger refund - and my family member had to pay it back to the IRS - over $3,000 worth.)

No one in my family will go to them for taxes any more.

We have too many odds and ends now, like profit sharing, IRA, stock, and 401k. I don't want to risk getting that screwed up! We go to an accountant..I bet we pay maybe $10 more than H&R charges. It's worth it for the peace of mind.

If you have multiple W-2's, stock plans, own a small business or have circumstances that make your return more complicated than the average person's, I definitely recommend going to an accountant to have your taxes done. Yes, it's more expensive, but in the long run, it's for the best.

Exactly..We don't have the money to throw away on tax errors!!

That's so true, fins - and NO ONE needs an audit by the IRS when someone else screws up their taxes!!

I sent a suggestion to Mike and Vikas seeing if they think replacing the Christmas Budgeting Forum with a tax forum for 2007. i think that it would be helpful just as long as there is a disclaimer that all people should seek their tax advisor professional advise b4 filing or something like that

That's a great idea, Ashley - thanks!

That is a good idea Ashley. I wish that there were people who wouldn't run out there to get their money so fast and wait until everything have to come in such as 401Ks and other documentation. You will be surprised at the number of people who get audited by the IRS each year because they failed to mention something on their taxes.

And like I said, they don't tell people how much they are going to spend for these "loans", which is what they are.

I did that instant thing last year and needless to say, I am going somewhere different to get my refund done this year. I think that I paid like $280 just to get it fast. You guys are right, they are just like a PDL with the high interest..

Alexandra, I just read your blog and it's great...Thanks for the info...

You can do your own taxes for free via the internet, you can gain access through the IRS site. It is very easy and you don't need a calculator. The program used is basically the same as those rip offs. You really only need your W2 and what you plan to deduct. The programs do the math for you, you just plug in the numbers. And if something is wrong it will not let you submit your tax return until you go back and fix it. You can get your refunds within 14 days and quicker if you have them direct deposit it. I have been doing it this way for a few years now and saving my money.

I tried to do that last year and I wasn't really sure about where all of the numbers go. I was scared that I would screw up and do something wrong.

I use TaxAct. It was pretty easy, it walks you through step by step, and won't let you submit unless you correct errors it finds.

Is that the name of the website??

Yes, it's taxact. You can check it out.

Nat - there are many sites that let you do your taxes online, and they're secure. I use Turbotax, and have for years - never had a problem at all. It guides you through the taxes step by step, reviews for errors, checks for things that would flag your return for an audit, checks for missing deductions, etc.
It even tests your income and deductions to see what form you need to file.

turbotax.com

The one Steelers mentioned is very similar - they're both very good programs. It's at taxact.com

Nat, I've used TaxAct, as well, for the last couple of years. It's pretty easy to use. After you're finished with everything, you have a chance to review it before you send it. Let us know if you need any help with it.

Ashley, that's a great idea, replacing the Christmas budget forum with a tax forum. Keep us posted on that.

Thanks for the info guys. I should have my W2 in a week or so. I will try to do it and if I have any ??'s I will post..Thanks again...

I use Turbotax as well. Never had a problem!

PS...TaxAct is an H&R Block product!

Really? I wasn't aware of that, Roadwarrior.

I am sorry dbaker6....

TaxCut is a Block product,not TaxAct!

Whew, thanks, Roadwarrior!

I am sorry dbaker6. I did not mean to scare you.

That's okay, Roadwarrior. Thanks for posting the info. I'll be sure to stay away from Taxcut.

I actually overheard someone at work today referring someone to H&R Block for one of these loans...I leaned over and advised them against it, using the info found here....told them it's nothing but a glorified payday loan, with huge interest rates, and you don't get your full refund - you only get part of it and have to file with them to get the rest. So you're trapped into using THEIR services. :shock:

Update on this topic - it appears even the little guys are getting in on this "advance tax refund" thing that H&R Block is doing. One of our local tax preparers in a larger city near me is advertising that they're doing it as well - the only difference was that they specifically said "cash advance" or "advance on your refund", where H&R Block's ad is a little shadier and makes it sound like you're going to get your whole refund up front. Neither of them disclose the fees, though. Or if they did, I sure didn't see it!