Wisconsin CU League News Release - 02/28/11
Need cash? Website shows how to get your tax refund fast and free,
help to file
Pewaukee, Wis. - With the new year comes tax season – a
great time to turn your refund into much-needed cash. But instead of
paying fees to a tax preparer for a speedy refund, use a deposit account
you already have (or open one) so you won’t lose a penny of what
you have coming.
The website www.freetaxrefund.org explains
how you can access a free refund whether you prepare your own taxes, use
a paid tax preparation service, or use any of the hundreds of sites
around the state offering people with limited incomes free help to
prepare and file their tax forms. The site explains how to use direct
deposit to get a no-cost tax refund, where to find free tax assistance
sites and what to bring for help with filing.
According to the Wisconsin Credit Union League, which maintains the
site, every one of Wisconsin’s more than 2 million credit union
members already has a savings account that can be used to receive a free
tax refund. Those who don’t have an account can open one at a
not-for-profit credit union by placing as little as $5 on deposit
– far lower than what for-profit financial institutions
require.
Many low-income filers – who seek a fast refund to pay bills and
meet immediate needs – turn to paid tax preparers charging
interest as much as 521% APR to obtain what’s called a "refund
anticipation loan," or RAL. These short-term, high-interest loans
– secured by the pending refund – can drain hundreds of
dollars from a typical refund.
For example, a single worker making less than $32,000 and raising one
child would qualify for a refund of as much as $2,600. But to obtain
that refund using a RAL, the filer could pay more than $100 on top of a
typical $150 tax preparation fee, losing more than $250 (a full 10
percent or more) of his or her total return. Put simply, if you use a
RAL you’re paying dearly to borrow your own money.
Wisconsinites who took advantage of free tax assistance sites offering
direct deposit in 2010, however, saved an estimated $14.8 million by
avoiding RALs. Visit www.freetaxrefund.org to learn
more.
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