Getting your refund early from a tax preparer is likely to come with a lot of fees attached that can cut into your share, the state Office of Consumer Affairs and Business Regulation found.
The office looked at fees connected to offers of refund anticipation cards. Tax preparation companies put the amount of the refund from a tax return on a prepaid debit card, so the consumer doesn't have to wait for the government. But fees are often taken out upfront and along the way.
“Refund anticipation cards don't make a lot of financial sense,” said Undersecretary of Consumer Affairs and Business Regulation Barbara Anthony. "If consumers can wait for their refunds, we encourage them to, otherwise they are paying fees on their own money.”
Similarly, refund anticipation checks, which allows customers to draw from an account connected to the tax preparation service, also come with fees.
Here's what the state found:
- H&R Block offers refund anticipation payments on its Emerald Prepaid MasterCard. There is a $54.95 fee for a paper check or a $34.95 fee for direct deposit or prepaid card. The card has a $2.50 fee for each ATM withdrawal; a $25 fee to access the funds at a bank teller; a $4.95 fee to reload cash on the card at a retail location (not including independent fees by the retailer); a $2.50 monthly inactivity fee after three months of inactivity; and a $1 fee to check the card’s balance at an ATM. If the card is lost, there is a $35 expedited delivery fee for a replacement card.
- Jackson Hewitt Tax Services stated that they do not offer refund anticipation payments, but that refunds could be transferred to its smart card upon credit approval. The Jackson Hewitt smart card is a Visa prepaid card issued by MetaBank and is not connected to a checking account. The card has a $5.95 monthly fee; a $2.50 fee for ATM or over-the-counter withdrawals; and an undisclosed administrative fee. If the card is lost, there is a $55 express shipping fee for a replacement card.
- Liberty Tax Service offers refund transfers onto its netSpend card for a one-time fee of $48.95. The card has a $1 signature purchase transaction fee; a $1 PIN purchase transaction fee; a $2.50 fee for ATM cash withdrawals; and a $5.95 monthly inactivity fee after three months of inactivity.
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Mitch Lipka is one of America's leading consumer journalists and advocates. He is an expert in product safety, recalls, scams, and helping consumers get out of jams. He is a nationally known consumer columnist and runs TheConsumerChronicle.com. He lives in Worcester. You can find him on Facebook or reach him at ConsumerNews@Aol.com