 |
| Tax Refunds |
Most customers walking into Laura Banda's shop are there to get their taxes done. They grumble if they have to send a check to Uncle Sam, or look forward to a refund arriving in couple of weeks.Then there are others who can't wait that long - they have rent to pay and mouths to feed, Banda said.
For them, the Pomona-based Liberty Tax Service also serves as a lender - it facilitates refund anticipation loans which are secured by the taxpayers' expected refunds.
"When the economy is bad, if they can get their hands on some kind of money, it will help," Banda said.
The loans are not free and are frequently marketed to taxpayers who can't afford to pay for professional tax preparation services, critics say. But with proliferation of e-filing, they may soon become obsolete.
To qualify for a $1,500 loan, Banda's customers must have at least $2,000 in anticipated federal tax refund. They pay $61.22 in finance and credit check fees plus another $29.95 for a bank processing fee.
Tax preparation fees - which start at $125 - as well as loan fees are subtracted directly from the refund, so that the cash-strapped taxpayer does not have make any out-of-pocket payments, Banda said.
In the last five years, 3 percent of Californians have used tax refund loans, according to Urban Institute, a nonpartisan policy research and educational organization.
Nationwide, 7.2 million taxpayers took refund loans in 2009, paying
Sources: http://www.dailybulletin.com
For them, the Pomona-based Liberty Tax Service also serves as a lender - it facilitates refund anticipation loans which are secured by the taxpayers' expected refunds.
"When the economy is bad, if they can get their hands on some kind of money, it will help," Banda said.
The loans are not free and are frequently marketed to taxpayers who can't afford to pay for professional tax preparation services, critics say. But with proliferation of e-filing, they may soon become obsolete.
To qualify for a $1,500 loan, Banda's customers must have at least $2,000 in anticipated federal tax refund. They pay $61.22 in finance and credit check fees plus another $29.95 for a bank processing fee.
Tax preparation fees - which start at $125 - as well as loan fees are subtracted directly from the refund, so that the cash-strapped taxpayer does not have make any out-of-pocket payments, Banda said.
In the last five years, 3 percent of Californians have used tax refund loans, according to Urban Institute, a nonpartisan policy research and educational organization.
Nationwide, 7.2 million taxpayers took refund loans in 2009, paying
Sources: http://www.dailybulletin.com
