Carefully weigh your options for filing your income tax return. With some tax preparers, you will end up with less of your own money and they will end up with more of yours. Here are some tips to keep in mind.

Be wary of “rapid refunds”, “money up-front” or “instant refunds”. These are the so-called Refund Anticipation Loans. You are borrowing your own money at a very high cost. The loans might cost anywhere from $30 up to $90 in addition to fees and interest. The cost of the interest alone could be 60% up to 700%.

In addition to being very expensive, these loans could cause you many financial problems. Your refund could be denied, or if your refund is less than what was expected, you could end up owing all that you “borrowed” with that loan. Your refund could be denied or reduced for many reasons, and this is why it is not prudent to borrow using these kinds of loans.

Don’t let sellers of cars, furniture, jewelry, or lenders use your taxes to purchase or for payment up front. You will be agreeing to borrow in anticipation of your refund. You will pay a high fee for the tax preparation, a high fee for the loan, and other types of fees for these types of offers. Many times, people who prepare taxes in these places do not have training or experience.

If you wait, you will obtain your refund directly from the IRS and it won’t cost you a penny extra. You can get free help with preparing your taxes from the IRS or VITA centers (Volunteer Income Tax Assistance). For help, call 1-800-829-1040. Some of these places may file your taxes electronically and you may obtain your refund by direct deposit in your bank account in 10 days.

In regards to tax preparers, it is important to carefully choose the companies or individuals that you use to prepare your tax return:

  • Avoid preparers who say that they can obtain refunds more quickly than others.
  • Avoid preparers who use a percentage of your refund to pay their fees.
  • Use a preparer who signs your tax return and gives you a copy of your tax return.
  • Make sure that the preparer will be there to respond to your questions long after filing your return.
  • Review your tax return before signing it. If you don’t understand, ask questions.
  • Never sign a blank copy of your tax return. You are responsible for all of the information in your return even if the preparer does not complete it correctly.
  • Figure out if someone knows a preparer who they have used. See if they were satisfied with their services.
  • Ask the preparer if they are an accredited tax preparer, an authorized agent, Certified Public Accountant (CPA), authorized public accountants or a lawyer who specializes in taxes.
  • Ask if they belong to a company that provides their members with continuous education courses and that they comply with their professional code of ethics.

Get information about free help with your taxes. Call the IRS at 1-800-829-1040.