If the recession has hit you hard and you are anxiously awaiting your tax refund, you are not alone. Many people are asking: “When will I receive my IRS refund?” And “where can you borrow money on your tax return?” But even if you need the money right away, it might not be worth the price. You may be better off in the long run waiting a couple extra weeks.
Short term loans, also called “instant refund loans,” or “refund anticipation loans,” cost Americans over $900 million dollars in fees last year. More than 12 million of us were willing to pay outrageously high fees and percentage rates just to get our refund money a few days sooner.
3 Reasons Not To Even Ask Where Can You Borrow Money On Your Tax Return
1. Large Fees: With initial loan fees, tax prep fees, and electronic filing fees your average $2000 refund is being reduced by as much as $300 or more just to start the filing and loan process. Many who anxiously ask, “When will I receive my IRS refund” and look for a tax refund loan are setting themselves up to pay out in fees.
2. Outrageous APR: To be able to receive the loan on your money, you will have to pay an annual percentage rate of anywhere from 222.5% to more than 2000%. Not many of us would accept those terms on a loan at any other time. This kind of interest is astronomical to say the least. Yet many of us are willing to accept it when the loan is short term.
3. IRS Could Hold Up Your Refund: If the IRS has a problem, for any reason, with your tax return, they can hold up your refund. If this happens your short-term loan could last months or longer and you are now responsible for paying back the entire loan at a high interest rate. This can turn out to be very expensive.
A little planning a head can keep you from being tempted to look for where can you borrow money on your tax return. There are specific things you can do to keep yourself from anxiously asking, “When will I receive my IRS refund” and being tempted to risk the high fees and interest just to get your money a few days earlier.
3 Actions To Take For Next Year
1. Reduce your tax withholding for next year.
2. File as soon as you receive your W-2, using electronic filing, and direct deposit.
3. Change your financial circumstances.
Perhaps this could be your year to invest in yourself and your financial future by earning extra money in your own online business. Many online businesses have a low start up cost. Make sure you learn how to market that business so it makes money instead of loses money. To really make it succeed you should consider enrolling in an online marketing and mentoring program. Taking small steps to change your circumstances can go along way to making a big change in your financial future. Starting an online business on the side of your regular job can potentially earn enough income to eliminate the need to ask “where can you borrow money on your tax return” and the anxiety felt in wondering “when will I receive my IRS refund”. Being more in control of your finances will keep you from feeling desperate enough to pay such high rates on your own money for a 10-day loan.