Attorney General Warns Against Tax-Refund-Anticipation Loans
Attorney General Lisa Madigan advises residents to beware of the high cost of tax-refund-anticipation loans that allow them to receive instant cash based on the amount of their anticipated tax refund.
Consumers can mistake such advance loans on their expected refunds as just an advance, but they "are riddled with fees that are deducted from their refund even before a taxpayer cashes it," according to a press release from Ms. Madigan's office.
Ms. Madigan says taxpayers should avoid such loans because they can receive their full refunds in as little as 10 days by filing electronically and having their refunds directly deposited into a bank account.
"The costs of these loans outweigh the benefits," she says in the press release. "Receiving a refund check instantly may be tempting for some, but with all the added fees, consumers should know these loans will end up costing them much more money in the end."
The Attorney General also reminds families to determine if they are eligible for the earned income tax credit, the federal government's largest program benefiting working families with low incomes, according to the release.
Free tax preparation sites are available to determine eligibility and help taxpayers file their returns on time. Consumers seeking help to prepare and file their taxes free of charge can visit the Center for Economic Progress website at www.economicprogress.org.