Revenue Commissioner Alan LeBovidge is advising taxpayers of the dangers of Refund Anticipation Loans and urging them to take advantage of the Department's e-file program.
"Refund Anticipation Loans may look tempting at first glance, but in reality, these are expensive, short-term loans that are being offered as instant refunds," LeBovidge said. "Taxpayers end up paying excessive fees to receive money that is already coming to them." In addition to the return preparation fee, tax preparation companies attach interest rates to the loan, often as high as 250%.
The quickest way for a taxpayer to receive their refund is to electronically file (e-file) their return. Taxpayers who file their state tax return through DOR's Telefile or by e-file can receive their refund in just 3 to 4 days, or even faster if they use direct deposit. DOR encourages taxpayers to wait these few days to receive the full refund that they are entitled to in order to avoid these very costly interest rates.
Many taxpayers qualify to file their federal and state taxes for free. As part of the Massachusetts Free File Alliance, several independent software companies have agreed to provide free tax preparation services to those taxpayers who meet certain eligibility requirements.
To learn more about e-file and the Free File Alliance, taxpayers can visit DOR's website ( www.mass.gov/dor) and the IRS' website ( www.irs.gov), 24 hours a day, from the convenience of their own home or office. Taxpayers can also contact DOR's Customer Service Bureau at 617-887-MDOR or toll-free in Massachusetts at 800-392-6089.