Reply
Esteemed Contributor
Posts: 7,632
Registered: ‎03-09-2010

Re: I filed my taxes already.

I e-filed my taxes last week (and have for many years) and didn't have any kind of transfer fee. What company or online site did you use? It may be legit, I don't know, but it sounds fishy to me.

Super Contributor
Posts: 356
Registered: ‎07-03-2013

Re: I filed my taxes already.

I have used Tax Act for many years too. I don't rcall their fee...around $25 i think. There are several levels of fees and mine is the second level. Takes care 9f my itemization, deductibles and income. I live in Texas so there is no state income tax so that is not an additional fee. This transfer fee must be new! Did they state the additional fee before you elected to have a direct deposit? If they don't state it upfront, i think that's deceptive.  I will look for another program to file my taxes!

Contributor
Posts: 46
Registered: ‎08-13-2021

Re: I filed my taxes already.

CPA here

 

First of all, the Internal Revenue Service NEVER charges to direct deposit a tax  refund into taxpayer's account - in fact, they prefer direct deposit over paper check and in most instances the refund will be direct deposited within three weeks of e-filing the return, often sooner.

 

However, some tax preparers and tax software companies offer what is referred to as rapid refunds - instead of the refund being sent directly to the taxpayer, it is directed to go to the preparer/software company, which in turn upfront the money to the taxpayer (prior to receiving the refund from the government) and any preparation fees/service charges can be directly debited from the refund. While rapid refund does provide the taxpayer quick access to their money, it generally comes at a cost, usually a percentage of the refund. This is a huge money maker - when I go to professional conferences (unfortunately, due to Covid had not had an in person conference in two years), the exhibit halls are filled with vendors trying to sell rapid refund services to tax preparers - there are more vendors for rapid refund services than for software.

 

For our clients who need their refund money quickly (we generally advise against refunds - in reality - the taxpayer has provided an interest free loan to the government), we recommend e-filing of the tax return as early as possible and select direct deposit to avoid the extra fees.

Honored Contributor
Posts: 28,171
Registered: ‎05-22-2016

Re: I filed my taxes already.

[ Edited ]

@CalminHeart wrote:

I e-filed my taxes last week (and have for many years) and didn't have any kind of transfer fee. What company or online site did you use? It may be legit, I don't know, but it sounds fishy to me.


 

 

 

@CalminHeart 

I used TaxAct. I think what happened is I agreed to their filing fee be deducted from my refund instead of me using a credit card to pay it up front. So when I did that there was the additional transfer fee of $54.95 charged to me and that amount will also be deducted from my tax refund. Had I just paid for TaxAct's filing fee then the transfer fee would not have been a concern. The reason why I didn't use my credit card to pay for the filing fee is b/c I didn't want my CC info out there.

 

I filed my taxes that exact same way last year and the transfer fee wasn't there. So it must be something new they started doing this year.

 

@Shiloh09