An "instant" tax refund from a tax preparation service may sound like a great idea, but before you sign up consider this: That refund is actually a short-term loan and the annualized interest rate can top 100 percent.
Unless your desperation is worth that much, you're better off using the IRS' e-file program with direct deposit. With that, you'll get your federal tax refund in about 10 days.
If you're planning to hire a tax preparer, make sure you:
Review their qualifications, fees and charges -- and avoid anyone who claims to base their charges on the amount of tax you owe or the refund you expect.
Ask whether they'll represent you at a government audit.
Have the preparer sign your tax return. Obtain a copy of your return and a receipt for the preparer's fees.
Never sign a tax return that is blank, incomplete or filled out in pencil.
Low-income taxpayers – those making $50,000 or less – can get free help from the VITA (Volunteer Income Tax Assistance) program. CLICK HERE or here or call (800) 906-9887 to find a VITA site near you.
Seniors who need help filing their taxes can get free help from the TCE (Tax Counseling for the Elderly) program. CLICK HERE to find a location or call (888) 227-7669.
Remember -- tax time also brings out the con artists.
Some tax scams can be quite sophisticated, employing logos and web addresses that mimic the real IRS.gov website. Consumers have reported getting emails referring to their pending refunds or threatening an audit. But the IRS says it never uses email, text messages or other electronic communications to ask taxpayers for their personal or financial information.
If you get a tax scam email, do not reply and do not open any attachments or click on any links. Forward the suspicious email to email@example.com, then delete it from your computer. (Suspicious texts can be forwarded to (202) 552-1226.)
If you've been scammed out of money, file a complaint with the Federal Trade Commission at FTC.gov.
If you get a phone call from someone claiming to be with the IRS but you're suspicious about it, ask for a call-back number and an employee badge number and contact the IRS at (800) 829-1040 to determine whether it's legitimate. If you receive a letter from the IRS but you're not sure whether it's legit, call the IRS to check.
(Source: IRS, Wisconsin Department of Revenue, New York City Department of Consumer Affairs)