If a tax preparer offers you a tax refund product such as a refund advance loan or anticipation check, experts advise to first read the fine print. 

That’s because nearly 16% of American taxpayers paid more than $842 million in fees to receive their 2023 refunds. Of those, about 96% used a refund anticipation check, or RAC, the Treasury Inspector General for Tax Administration estimated in a report last week. Another 4% used a refund anticipation loan, or RAL.

These products can appeal to taxpayers who are eager to get their refunds and who don’t want to wait days or weeks for the IRS to deposit the money into their accounts or cut a check. And while the seven tax return preparer companies that account for almost 80% of the total refund products are “largely complying with applicable guidance, not all information was clearly available for consumers,” according to the agency’s review of their websites.

“In some instances, fees and cost information for these products were not clearly advertised, and it required reading the fine print or going through multiple pages to find some cost information,” it stated.

Fees for advance tax refund loans and checks

The RAC fees ranged from $25 to $55 for filing season 2024, according to the report. The average refund for these taxpayers was $3,841, indicating that the cost of the RAC was about 1% of the total refund. The average refund for a fee-based RAL was $6,696. 

Refunds might come on prepaid cards, with associated fees that can vary greatly, and many charge fees for out-of-network ATMs, cautions the Consumer Financial Protection Bureau. 

Further, many taxpayers qualify for free assistance from preparers certified by the IRS. 

“Many taxpayers get their refunds from the IRS in 10 to 21 days,” the CFPB advises. “Waiting a week or two can save you money.”

Here’s how to find a volunteer in your community or online: 

• Go to irs.gov and search for “Free Tax Return Preparation”
• Go to AARP.org and search for “Tax-Aide Locator”
• Go to GetYourRefund.org for online tax papration
• Go to MyFreeTaxes.com to prepare your own return with assistance