Taxpayers often look for refund anticipation loans so they can get their income tax money faster. While this can be beneficial for anyone that has a sudden financial obligation, the question remains: is getting a refund anticipation loan a good bet for most taxpayers?
Many taxpayers that are going to be using the first-time homebuyer tax credit are going to have to send additional documentation with their income tax form, so it will most likely take more time to get their refund. However, some states may also have to delay refunds due to budget concerns, and this is causing many to consider a refund anticipation loan.
Yet, getting a loan on money that you are set to receive anyway isn’t always going to be in your best interest. Taxpayers often feel that certain purchases, which aren’t really necessary, are vital and they wait until their tax refund is due to buy certain items. However, vacations, new clothes, or other non-necessities can wait on your tax refund to arrive.
Those who worry about getting their refund in a timely manner because of an emergency financial situation may need a refund anticipation loan, but should only get one if it is imperative. If a taxpayer does take out a refund anticipation loan they should be sure to go with a reputable lender or tax preparation company and make strides to pay back the loan and interest as quickly as possible.