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Understanding Tax Refund Advance Loans

What Is a Tax Refund Advance Loan?

A tax refund advance loan provides you with a portion of your federal tax refund when you e-file your tax return with a tax preparation service that offers these loans. These loans are generally fee-free with a 0% annual percentage rate (APR) and can often be funded on the same day your e-filed return is accepted by the IRS.

How to Get a Tax Refund Loan

To get a tax refund advance, start by finding a tax preparation service that offers these loans. Compare different options to ensure you get the best fit for your needs. Here’s how some popular tax preparation firms stack up:

H&R Block

• Request a refund advance loan when you e-file your taxes with an H&R Block tax pro.
• Apply for a refund advance of $250, $500, $750, $1,250, or $3,500.
• Pay $0 in loan fees and 0% APR.
• Receive funds via the Spruce mobile banking app or an Emerald prepaid debit card.

Jackson Hewitt

• Available at most Jackson Hewitt locations nationwide.
• Apply for a refund advance of $250 to $6,500 based on your qualifying estimated refund.
• Pay $0 in loan fees and 0% APR.
• Receive funds on a prepaid Serve American Express card or direct deposit.

TurboTax

• Apply for a tax refund advance when you e-file your return using TurboTax.
• Apply for a loan of up to 50% of your federal tax refund.
• Pay $0 in loan fees and 0% APR.
• Receive your advance minutes after the IRS accepts your e-filed return.

How Much Does a Tax Refund Advance Cost?

While tax refund advance loans are typically zero interest and fee-free, there are a few costs and limitations to consider:

• Tax preparation fees: Paying a tax preparation company to apply for a refund advance is an added expense if you were planning to do your own taxes for free.
• Prepaid card fees: Using a prepaid card to access your funds may come with minor fees, such as ATM fees.
• Unpaid balances: If your refund doesn’t cover your outstanding loan, you’ll have an outstanding balance that may be due and payable.

Is It a Good Idea to Get a Tax Refund Loan?

Consider the pros and cons of getting a tax refund advance loan:

Pros

• Low-cost way to get a portion of your federal tax refund money fast.
• 0% interest and $0 in fees.
• Receive and repay your money with almost no effort.
• Avoid IRS delays.

Cons

• You may not qualify for the loan.
• You may end up with an account you don’t want.
• You run the risk of overspending.

Can I Get a Loan on My Tax Refund if I Already Filed?

Refund advance programs typically require you to apply for your loan when you e-file your taxes with the help of the tax prep company. If you’ve already filed your return with the IRS, you’re no longer eligible to meet these requirements.

The Bottom Line

A tax refund advance loan can be an easy, low- or no-cost option that lets you start using your tax refund sooner. If you were already planning to pay for tax prep, there’s little downside to getting a refund advance. Just make sure your timing is right: If you wait too late into the tax season or file your return without requesting an advance, you may miss the opportunity until next year.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. We are here to help you with all your mortgage needs!

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