Where have I been? When did the income tax return business get so big? I have a book that points out that the "Rapid Refund" is really a predatory lending scam, which makes sense to me. But I don't remember my financial life ever revolving around my income tax return money. Not in my twenties, not ever.
I watch a lot of court shows. My favorite is People's Court, but I can handle Judge Judy too. Apparently many, many people work their entire household finances around the windfall they get when they get their tax refund. I had absolutely no idea. Really?
In my twenties I filed 1040 EZ and got a few hundred bucks back. I never saw this as a bonanza, I usually paid my car insurance with it, or something like that. According to the court shows the folks at the lower end of the income spectrum really depend on their refunds to make their budgets work.
Judging by the large number of commercials now advertising tax services, I see that getting the money as early as possible is a huge deal for some people. Some tax prep places are willing to extend loans based upon the last pay stub. I'm sure there are some processing fees that equal some huge percentage of the amount to be refunded.
It's insidious. You pay them to prepare the taxes, around $70 bucks, then they have a loan origination fee of $40 or $50, and you can have your refund in about 4 or 5 days. Never mind that you can do your own 1040 EZ in about 5 minutes, since you don't have anything other than the standard deduction, and have your money in about a week, if you file early.
I used a CPA last year. Want to talk about a scam? He charged $900 to prepare our taxes. The only reason I did it was because of some property we own in Kentucky that we needed to have sorted out. I usually use TurboTax, but I'm beginning to wonder about that too. You pay $49 for the software and $15.00 each to file State and Federal. I do it because I like to file electronically.
I'm going to see if the IRS has a way for me to do the taxes on line for free. That would be Sweeeeeet!
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I cringe at how often I hear someone say "Oh yes, once we get our tax refund..." because it's always someone who wouldn't NEED to wait for their tax refund if they just payed their bills on time in the first place. Debt is an expensive business, and I think those refund advance loans are terrible, terrible things.
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