Tax Refund Transfer
If a taxpayer wants to file his or her tax return without paying for the tax preparation fee, then he or she can apply for a tax refund transfer or RT which is a bank product. The Tax Refund Transfer is different from the Refund Anticipation Loan (RAL) or the RAL Advance Loan. While both RALs are real short term loans, with the tax Refund Transfer (RT) the taxpayer can have his or her federal and state tax refunds deposited into the service bank.
Differences between a tax Refund Transfer and Electronic filing?
With e-filing or electronic filing, the taxpayer has to pay for the tax preparation fee upfront. With the tax Refund Transfer option, the taxpayer can have the tax preparation fee deducted from the tax refund he or she will receive.
In term of tax filing, the tax Refund Transfer option utilizes e-filing to the IRS and to the state if applicable.
When a taxpayer e-files his or her tax return, he or she pays for the tax preparation fee with cash, check or credit card whereas with the tax Refund Transfer option the taxpayer can use the tax refund to pay for the tax preparation fee.
While using e-file, the taxpayer can opt to have the tax refund direct deposited into his or her bank account and it takes 8-15 days, the taxpayer can also opt to have the IRS send the tax refund check but it takes about 15-22 days for the IRS to send the check. With the RT option, the service bank will have the tax refund deposited into its account in 8-15 days.
How to get my tax refund with the Tax Refund Transfer option?
The Tax Refund Transfer option is very similar to e-filing except that a bank is involved. After the IRS has accepted the tax return and has released the tax refund, the IRS will deposit the tax refund into the service bank's account. A check will then be printed at the tax preparer's office or the amount of tax refund less fees can be direct deposited into the taxpayer's account.
When will I receive my tax refund with this tax Refund Transfer (RT) option?
With the Tax Refund Transfer option or RT, the taxpayer will receive his or her tax refund within 8-15 days depending on when the IRS releases the tax refund. This is the same amount of time it takes for the IRS to give tax refunds to taxpayers when taxpayers electronic file their tax returns.