E-filing can make high-fee loans unnecessary

While other tax prep firms think of new ways of providing fee-based access to a taxpayer’s own money, TurboTax, the tax preparation software company (Intuit) has taken a different tack.  It is offering access to bonuses that will increase a refund’s value instead.

“We found that typically taxpayers allocate their refunds in thirds—a third to savings, a third to debt repayment and a third toward everyday spending,” says Julie Miller, a spokesperson for TurboTax in San Diego.

The TurboTax Refund Bonus program focuses on that last third.  TurboTax users, who pay for the software and a nominal electronic-filing fee (although those costs can be deducted if you itemize) — have the option of receiving some or all of their refund in the form of gift cards issued by any combination of the fifty retailers participating in the program. For their part, the retailing partners then add bonus dollars to these gift cards.  For instance, a taxpayer may opt to use $90 of a $2,000 refund to purchase a $100 Starbucks gift card and another $540 to get a $600 gift card to use at Lowe’s, taking the remainder in cash. 

“Our retailing partners represent places our customers would be going to and spending money at anyway, throughout the year. This is not about telling them how to spend their money. It is not really about the spending, but about helping them get more from what they would be spending anyway,” says Miller.

Miller says the cards have no expiration date and no usage fees, though there is a shipping fee. Multiple cards may be selected, or no cards, it is up to each customer to design their own rewards program.

But by giving customers an opportunity to get more than what is owed them, the program is the polar opposite of an ‘Instant Tax Refund.’  There the reduction in what is owed may result in a hustle that has nothing to do with the speed with which a refund is returned to a taxpayer by the preparer.

Where’s My Refund?
For those who think a refund is taking too long to arrive in their bank account or mailbox, the IRS maintains a free and automated online inquiry service to let taxpayers check the status of their return.  To find out what the status of a refund is, a taxpayer needs to supply their Social Security Number, filing status, and the refund amount.  The same service is also available by phone at either 800-829-1954 or 800-829-4477.

MORE FROM TAX TACTICS

Tax Tactics Section Front

99 percent chance IRS won’t audit if you ... House votes to extend $31 billion in tax breaks Tax credit is coming back to bite millions Foreign account tax amnesty deadline extended IRS rules for medical deductions are sickening Preparing for the unknown: Higher taxes Under plans, tax on the richest set to rise Deficit can lead to more IRS audits, experts say Large tax bill looms for Jackson estate Small businesses get a ‘tax break,’ for now Tax Tactics Section Front   Add Tax Tactics headlines to your news reader: