Rapid Tax Refunds

Desperate times call for desperate measures. When it comes to tax season this often means getting your refund sooner than later by taking advantage of one of numerous "fast, no hassle" refund offers available. But before you do, consider the tax-preparation fees, electronic filing fees, and refund loan fees that quickly cut into your refund total for the sake of a fast-cash solution.

Refund anticipation loans (RALs) are short-term cash advances that provide cash against a customer's anticipated income tax refund. The Washington Post columnist Michelle Singletary cautions that RALs are a bad deal for you. A study on Earned Income Tax Credit conducted by the Brookings Institution's Center on Urban and Metropolitan Policy revealed that in many cities more than half of filers who qualify for the credit claim their refunds through high-cost RALs — loans that offer annual percentage interest rates of 200 percent. See the National Consumer Law Center brochure Don't Pay to Borrow Your Own Money.

If you are debating whether or not to get a refund-anticipation loan, consider the following alternatives:

• File your return over the Internet. The Internal Revenue Service (IRS) offers online filing of tax returns (e-file). The IRS also offers free federal return preparation and electronic filing through a number of partner companies. Simply log on to www.irs.gov and select FreeFile to see if you qualify. Filing online leads to faster refunds.

• To fast-track your refund turnaround time, allow the IRS to deposit directly into your bank account. Electronic filers who opt for this can expect their refund about 10 days after filing.

• Volunteer Income Tax Assistance and Tax Counseling for the Elderly are available to eligible low- or moderate-income taxpayers through local public libraries, churches, and community centers. The American Association of Retired Persons (AARP) offers a free Tax-Aide service. The United Way sponsors VITA programs: visit www.unitedway.org or call your local United Way chapter for more information. Also, colleges and universities frequently offer VITA and TCE programs, as well as local chapters of the American Bar Association (ABA). Try the ABA VITA Locator list for a VITA center near you. For more information on the VITA or TCE tax preparation programs, call the IRS at 1-800-829-1040.

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