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The Truth About Tax Refund Loans

Updated: Jul 15, 2021

Ever wonder why tax offices advertise heavily for refund anticipation loans? Is it to help you out of financial binds? Is it to help with Christmas or holiday shopping?

You Are a Target

As with any other retail season, shoppers are observed and statistically documented regarding demographics and spending habits by marketing groups and retailers. Tax season has been pegged as a peek shopping season. Those expecting a nice size refund file first, so they are targeted first for spending.

The Truth

  • Tax Offices get a kickback for being unofficial loan officers for the BANKS.

  • The interest rate can be considerably higher than taking out a personal loan or line of credit.

  • You still have to pay back the loan if the IRS makes adjustments on your tax return that may lower your refund, or have to keep your refund for past due obligations (Child Support, State Attorney General debt collection, Student Loans, etc..).

  • Federal enforcers shut down the illegal practices and abuse of predatory lending with these types of loans back in 2012. Although, they are legal to offer in present day, laws have been in put in place in attempt to keep the abuse from happening again.

  • The low to moderate income households and those who are not financially savvy are still heavily targeted. Especially since the new law of the government holding refunds that are a result of school or Earned Income Tax credit took effect.

Tax Star Mobile, LLC is TRULY committed to increasing Financial Knowledge among its clients. Therefore, we are one of the few that DO NOT participate in Refund Anticipation Loan programs.

Instead, we teach our clients how to better conduct their financial situations and by creating financial plans before their refund comes, so they don't get to the point of desperation where they become targets for Banks, Car Dealerships, Retail Stores, and other TAX OFFICES during income tax season. Those with low or moderate income are TARGETED HEAVILY during the months of January - Febraury, or even up until mid March.

We DO NOT recommend taking FINANCIAL ADVICE from anyone or any tax office that offers or recommend refund loans, as anyone with a financial background (EA, CPA, Accountant,Tax Attorney, Certified Financial Adviser, Financial Coach) KNOWS BETTER.

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