During the tax period there dramatic increases in the popularity of tax refund anticipation loans. The tax refund anticipation loans provide ways for taxpayers to access to funds rather than wait until the Internal Revenue authority processes tax refunds. They are short term loans that are processed against an anticipation of a tax refund. Many people are able t take advantage of the refund anticipation loans as an easier and faster way of getting cash right away. The loans are a good blessing to many people regardless of their circumstances are they are able to offer a source of cash when they are in need while waiting for the tax refunds. But at the same time, the loans have their disadvantages as they can turn out t be very expensive. Therefore, according to your circumstances refund anticipation loans can be a blessing and also bad. The following are some of the pros and cons of tax refund anticipation loans
Tax refund anticipation loans can sometimes come in handy. When you are facing a cash flow challenge and in need of cash immediately, the tax refund anticipation loan can bridge the gap. Depending on your cash flow needs, sometimes you can get cash check that can be able to meet your cash flow needs or even be able to cover a significant part of the problem
Refund anticipation loans at the same time are processed quicker than any other conversational loan. Normally after applying for a tax refund anticipation loan, it takes a minimum of 24 hours for the loan to be approved and then the funds will be seen to your bank account within 48 hours of approval. Hence, in comparison with conventional loans which take weeks to be approved, the loan can take a short period.
Refund anticipation loans do not have upfront costs and other income tax return costs. Only processing fees that are deducted from the loan hence the loan is cheaper.
The refund anticipation loan attached fees are generally very high. In provision of the loan, a third party is always involved hence increasing the interest costs of the loan. Even if the loans are provided by the tax preparers, the loans actually come from commercial lending organizations that provide it in normal interest rates. It is therefore not advisable to take the loan when you don’t need it as it will turn out to be very costly.
You will finally be responsible for the total value of the loan. In case the lending institution does not receive the anticipated tax refund from the internal Revenue Service, the principal and interest of the loan will be transferred to you.
The tax refund anticipation loan has been able to help many people to gain access to a quick and less-costly cash that can help in meeting personal and business cash flow challenges. But at the same time its interest rates are high. For more information on tax refund anticipation loans visit taxreturn247.com.au
The statute of limitations for tax returns provides a time frame within which the IRS can audit the responses received from a given taxpayer. Once the time frame expires, the IRS cannot conduct a review of the tax return and therefore, if the return was erroneous, no liability can arise. The time limitation affects both the taxpayer and the tax collector. This, therefore, means that the taxpayer can also not follow up on an unclaimed tax refund beyond the statute of limitations.
Below are the various statutes of limitations that affect tax returns:
General Statute of Limitation
In general, tax returns can only be audited for up to three years after such a return is filed or after the deadline for filing the return, whichever date falls later. This means that if a taxpayer files before the April tax deadline, the statute of limitation will lapse 3 years after the April deadline date.
On the other hand, if the taxpayer files for an extension or files late, the statute of limitation will lapse 3 years after the date of filing.
If the IRS has evidence to show that a taxpayer may have understated his income for a given year by more than 25%, the statute of limitations is increased to 6 years.
In such a case, the IRS can audit returns 6 years after they are filed or 6 years after the tax deadline for the year that the tax returns were filed – whichever comes later.
In Case of Fraud
In case the IRS suspects that there was wilful tax fraud by a taxpayer, then they can audit tax returns up to an indefinite time. However, the burden of proof lies with the IRS to show sufficient reason to suspect fraud.
If a taxpayer failed to file a tax return in a given year, then the IRS or state tax authorities will have no statute of limitation and can, therefore, audit such a taxpayer with no time limitations. It is, therefore, advisable to file a late return, so as to avoid giving the IRS this unlimited time frame.
In the case of a late tax return, the regular statute of limitation will kick off as soon as the late return is filed. This means that in general, the statute of limitation will lapse 3 years after the late return is filed.
In the case of a criminal investigation, the IRS has a statute of limitation of 6 years from the time the taxpayer files a return.
The statute of limitation is suspended as soon as a taxpayer successfully files and is granted bankruptcy.
Nobody likes waiting for the IRS to change their rules. Fortunately, you do not have to. It’s entirely possible to file easy tax returns – all you have to do is know whom to file them with. You can even start a return for free and only pay once you’ve gotten to the end of the process
Taxreturn247.com.au for years have helped businesses and individuals Nationwide, with their delinquent IRS & State tax problems.
When it comes to tax returns, the U.S. government stays current. Although this is debatable in regard to other matters, it’s true in this sense.
Once upon a time, after filing your tax returns, you had to wait to receive your money through snail mail – a.k.a. USPS. God knows we love our packages, postcards and holiday mail, but, when it comes to receiving our hard-earned money, services rendered by the government’s postal service simply don’t cut it. We want our money now. We want it today. And thanks to the direct deposit service offered by the IRS, we can receive our tax refund sooner rather than later.
After your tax return is submitted, it takes 21 days or less for your tax returns to be processed. “Processed” is the keyword here because people often expect to receive their money in 21 days or less.
These steps are easy, too. They simply involve supplying the IRS with a voided check and bank account number(s) before filing your refund. In addition to being easy, there are also some advantages to setting up direct deposit with the IRS. The first is…
Speedy Delivery: Actually 3 Weeks or Less
In addition to being processed in 3 weeks or less, you can actually receive your returns in this amount of time with direct deposit.
Unlike regular mail, direct deposit is lightning fast. After the funds are accepted by the IRS, the IRS doesn’t have to transfer your funds onto a paper check, package the check, stamp the envelope and send it. Funds are transferred with a click of a button to one or more bank accounts of your choice (see below).
With direct deposit, you don’t have to wait eagerly by your mailbox for that money you worked your behind off for last year. You just have to wait for that glorious notification on your smartphone: “Deposit Received by IRS.” Your smartphone’s set up to your bank account, right?
Split Your Return Between Multiple Accounts
Whether you’re e-filing or filing by hand, this process is easy. If you’re e-filing, the software or online service you’re using will simply ask you if you want to split your direct deposit between multiple accounts. After selecting yes, it’s just a matter of filling out the fields. If you’re filing long hand with paper forms, the IRS conveniently supplies the necessary document to allocate funds accordingly. This document, called Form 8888, allows you to deposit funds into 2-3 banks accounts. You can also purchase U.S. Series saving bonds with a portion of your refund and allocate the rest to various accounts.
The choice is yours and the options are endless!
Buy U.S. Series Saving Bonds and Deposit into Multiple Accounts
In 2012, 54,000 financially savvy U.S. taxpayers took advantage of the government’s savings bond option. More than $21.5 million was invested in these bonds and they are proven to put money from your tax refund to good use. According to the IRS, these bonds are “low-risk bonds that grow in value for up to 30 years. While you own them they earn interest and protect you from inflation.”
How does this relate to direct deposit? Well, you’re allowed to invest up to $5,000 of your tax refund in bonds. If your refund is greater than this and you want to invest the maximum amount, you can use direct deposit to allocate your remaining funds to one or more accounts. If your refund is less than $5,000, that’s okay! You can still invest a portion of your refund in bonds and use direct deposit to place money in your preferred spending/saving accounts. For more information visit www.taxreturn247.com.au today.