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A Good Name Credit | Income Tax Refund Loans and Back Taxes
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Income Tax Refund Loans and Back Taxes

Income Tax Refund Loans and Back Taxes

If you file your taxes electronically and allow the government to deposit your refund directly into your checking account, the Internal Revenue Service promises to refund your money within 21 days. Before 2012, you could get the money sooner through a refund anticipation loan offered by most tax preparers. Major lenders don’t offer RALs anymore, and any loan you take out to get your refund money early is based on your credit history and income, not your income tax refund. Past due state taxes will only affect the decision on your loan to the extent that the back taxes appear as a collections item on your credit report.

Back Taxes

If you owe back taxes, any refund you’re due from this year’s tax return automatically goes toward paying your back taxes. If you owe state back taxes, the state can put a lien on your federal refund. If you owe federal back taxes, the IRS can put a lien on your state refund. The government also can place a lien on your tax refund if you’re past due on student loans or if you’re behind on child support payments.

Refund Anticipation Loans

Prior to 2012, you could get a refund anticipation loan through your tax preparer and receive the funds in about a day. When the tax preparer received your refund, it paid off the loan and distributed any remaining balance to you. However, the government determined that RAL practices violated federal lending regulations and state laws, and the IRS changed its policy.

Getting Your Money Earlier

Some companies market short-term “payday loans” to consumers as a replacement for RALs. Consumers might not realize that the loans don’t consider the size of your refund or whether you owe back taxes. Lenders follow standard lending practices and consider your credit history and your annual income. To get approved for a loan, some lenders require that you have your paycheck direct deposited into your account. The company makes the loan due on a day you get paid, and it electronically debits your account for the balance of the loan before the bank even opens its doors for business.

Refund Anticipation Check

Some tax preparers charge a fee for a program called a refund anticipation check. A tax preparer charges a tax preparation fee to prepare and file your taxes. When you’re due a refund, the preparer loans you the money for the tax preparation fee until you receive your refund. You don’t have to pay anything out-of-pocket until the government sends your refund. A refund anticipation check doesn’t provide you with money any sooner than when the government provides it to you. It simply defers your tax preparation fee until you receive your refund.

What if you owe back taxes and need to pay them?

If you happen to owe back taxes, the IRS can garnish your paycheck, levy your bank accounts, put a lien on your home and seize other assets. It’s important to not let the debt pile on but it’s equally important that you don’t dig yourself into a deeper hole by taking on high interest loans to pay off your back taxes.

We always recommend getting in touch with a specialized tax resolution professional to help avoid the harsh penalties and interest that accrued on your back taxes. It’s far easier to navigate towards tax resolution, if you have a professional working with you. If you’d like to schedule a no-cost confidential tax relief consultation, contact us here. http://bit.ly/2W4kKbc

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Income Tax Refund Loans and Back Taxes
Article Name
Income Tax Refund Loans and Back Taxes
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If you owe back taxes, any refund you're due from this year's tax return automatically goes toward paying your back taxes.
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2 Comments
  • Tony
    Posted at 07:15h, 30 January Reply

    Hi

    I have tried sending you a message from your site but I have gotten an auto response saying it was not delivered for some bizarre reason, so here goes again! Please acknowledge receipt.

    As I mentioned in my earlier message, I would like to contribute one of my guides on crypto-backed loans to your blog. I used to work for a payday loan company in the UK and so I have quite a good knowledge of the financial lending sector. I decided to write this guide because I feel that cryptocurrency will have a major impact on the payday loan industry in the next 5 to 10 years. I have tried to be as detailed as possible so you will find that the guide is fairly lengthy. Perhaps it would be a good idea for you to split it up into several blog posts or do as you see fit.

    I am terribly sorry but I did not have much time to find royalty free images. One company that I contacted whilst doing research and collecting references for this guide did give me permission to publish on of their banners that I have included in the g-drive folder.

    The entire guide is saved in a Word document inside my Google drive which you can access via this link

    https://drive.google.com/drive/folders/1TjO3WVH0tKuzotBh65w8jrJaCUfsjDdP?usp=sharing

    I hope your readers will enjoy reading my guide.

    I would be most grateful if you could send me a link to the guide once you have published it!

    I will endeavour to write a couple more articles as and when I get some more free time: it is hell at work after the festive period.

    Have a fab day.

    Regards
    Tony

    • Jenella J. Brown
      Posted at 05:14h, 27 February Reply

      How can we help you? Give us a call at 727-816-9998. Thanks

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