Image Image

Image

Press Releases
Wisconsin CU League News Release - 02/02/10

 

Direct deposit, free-filing options can save taxpayers time and money

 


Additional resources

 

View PDF of release

 

View press release archive

 

Media contacts

 

Chris Henzig
Director of Communications
(262)549-0200, Ext. 6019
chenzig@theleague.coop

 

Chad Helminak
Web Producer and Media Relations Manager
(262) 549-0200, Ext. 6012
chelminak@theleague.coop

 

 

Pewaukee, Wis. – Wisconsin credit unions are encouraging the use of direct deposit and free-filing options this tax season in an effort to steer consumers away from costly “refund anticipation loans,” which drain millions from state refunds – particularly the refunds of people with low and moderate-incomes.

 

Short-term, high-interest loans called refund anticipation loans (RALs) are heavily marketed by paid tax preparation firms during tax time and can deplete hundreds of dollars from a typical refund. These loans alone cost Wisconsin tax filers $22.4 million in 2006 (the most recent year for data) in exchange for the promise of a fast refund. Alternatively, when paired with state and federal electronic filing options, direct deposit can deliver tax refunds with within a matter of days and at no cost.

 

“People use products like RALs for the promise of quick cash, but are essentially paying to borrow their own money,” says Brett Thompson, President & CEO of The Wisconsin Credit Union League, the trade association for the state’s not-for-profit credit unions. “But by using an existing savings account or opening one, anyone in Wisconsin can use direct deposit to get a speedy tax refund without hurting their wallet, and just as quickly as if they had used a RAL by using free electronic filing options.”

 

Data also show that RAL usage increases considerably among Wisconsin taxpayers eligible for the Earned Income Tax Credit (EITC) - a tax credit for low to moderate-income filers. Eighteen percent of EITC filers use RALs to receive their refunds, compared to 3% of all state tax filers. EITC-qualifying tax filers using RALs lost $14.4 million in 2006.

 

Thompson notes that free help is available, through volunteer tax preparation sites around Wisconsin, to persons of low and moderate-income and others who qualify. Credit unions have been assisting in the operation of these sites, which are coordinated in partnership with the IRS, Department of Revenue and AARP. In addition to free tax preparation, these sites promote tax education and asset-building strategies.

 

“By promoting these options, we have a great opportunity to help people keep their entire refunds and money within our local communities,” Thompson said.


Credit unions’ tax assistance efforts are part of their ongoing REAL Solutions® initiative, which strives to help Wisconsin families improve their financial position over time by encouraging saving and investing, improved creditworthiness and long-term wealth building.


The Wisconsin Credit Union League’s tax help website, www.freetaxrefund.org, provides more information on direct deposit, electronic filing and locations for free tax preparation assistance.

 

XXX


©2005 Wisconsin Credit Union League. All rights reserved.
Site powered by iMIS.