Refunds and Payments
The fastest way to receive your refund is through Direct Deposit. Customers who choose to have their tax returns filed electronically can have their refunds deposited directly into their bank account typically in less than two weeks.
You will need a savings or checking account into which the deposit will be wired. Cloister needs the account number and the bank’s routing transit number in order to process the Direct Deposit. A routing transit number can be found at the bottom of a check (deposit slips don’t usually have all the numbers we need). If you have a savings account, please contact your bank to get their routing transit number prior to your appointment.
This actually used to be a pretty easy question to answer but has become more difficult for a number of reasons. Starting in 2012 the IRS asked tax preparers to stop advising their clients about when they might receive their refunds. While there are a number of reasons why refunds get delayed, the #1 reason lately has been fraud. The IRS is redoubling its efforts to confirm that refunds issued are appropriate and legitimate. An excerpt from the IRS Web site sums it up well…
…the IRS also cautions taxpayers it is increasing scrutiny of tax returns for signs of fraud. This means some tax refunds will face additional screening and review before being released, which will add time before the refund is delivered.
The IRS promises that refunds for 9 of 10 taxpayers will be issued within 10 – 21 days. That’s a pretty wide gap!
What Cloister Tax Services can tell its clients is that in past years the vast majority of our clients who requested Direct Deposit refunds received those refunds within 10 business days after the return was filed.
A Refund Anticipation Loan (RAL), as its name implies, is a Loan made to a taxpayer by a bank in anticipation of a refund. The tax preparer is considered the loan agent and is responsible for handling the loan agreement between the taxpayer and the bank. Once it has been confirmed that a taxpayer is entitled to a refund, the bank authorizes the tax preparer to issue a check to the taxpayer. The amount of the check the taxpayer receives is typically equivalent to the amount of the refund the taxpayer is expecting, less any tax preparation fees, processing charges, and interest charged by the bank.
No. Cloister Tax Services considers RALs to be a predatory lending practice. As explained by the Credit Infocenter web site, “The RAL loans are offered at high interest rates, ranging from about 40% to over 700% APR”. As an alternative, Cloister Tax Services offers Electronic Filing with Direct Deposit of refunds directly into a customer’s bank account.
The first thing to remember is that a payment due on your income tax return doesn’t need to be submitted until the tax filing deadline (typically April 15th).
Get your taxes prepared early so you know how much money you’ll need to send on the 15th. Whatever you do, even if you know you’re going to owe taxes, make certain that you either file a tax return or an extension request on-or-before April 15th. Failure to file a return will only increase the amount you owe the IRS.
If you’re unable to pay all the taxes due on April 15th, pay as much as you can. After you file a return the IRS will send you a notice informing you that you owe them money. The amount due will include some interest charges. If you’re still unable to pay the amount they’re requesting, the IRS will work with you to set up a payment plan.
Always remember that the IRS wants to work with you to help resolve your tax issues. Choosing to ignore their notices will only complicate your situation.
If you’re uncomfortable speaking with the IRS, contact Cloister Tax Services and our Enrolled Agent will contact them on your behalf.