You can get a fast tax refund when you file electronically and choose to get a direct deposit. This option is usually available both at the national and regional level, and it is almost always faster than filing by paper. Some companies that prepare taxes give refund anticipation loans, allowing you to receive your money in one or two days, but you will have to pay a fee for the convenience of getting your return back that quickly, which may be high and often involves interest charges.
The surest way to get a fast tax refund is to electronically file your return before the deadline. Instead of waiting for someone to process your return, a computer will verify and accept it. You will receive prompt notification if the government rejects your return due to an error, and you will be told what you need to fix. After you correct your form, you'll be able to file an amended return and resubmit it for approval.
Depending on your income and your government's tax code, you may be able to e-file for free if you meet income guidelines, regardless of whether you prepare your own forms, use a service, or use tax preparation software. Should your income exceed certain limits, you might have to pay a small charge, but it is usually not as high as the charges for a refund anticipation loan. With e-filing, you can have the government send you a paper check or electronically deposit your refund in a bank account, as long as you have your bank's routing number and your account number. Getting a direct deposit is usually better and faster than getting a paper check, since it eliminates mail delays and potential misplacement. Most people who choose this option typically get their refunds in a few weeks.
When to File
Early filing is important if you want a fast tax refund. As the filing deadline approaches, government tax agencies can become overwhelmed, and you'll have to wait longer for your return to be processed. If you file as early as possible — a month or two before the deadline, if you can — the competition to issue approved returns will usually be less.
Filing well ahead of time also gives you more time to catch errors, which can keep you from having to file a corrected return and also help prevent processing delays. You'll want to double-check to make sure the amounts you list on your tax forms are identical to your income records, and make sure that your tax payer identification numbers, mailing addresses, and account numbers are all correct. In cases where you need to file multiple forms that ask for the same information, it's also important to ensure the amounts match, since discrepancies can cause delays.
Refund Anticipation Loans
Some tax preparation companies offer a fast tax refund service that involves refund anticipation loans, in which they use their money to give you a loan that's equal to the projected amount of your refund, along with fees and interest. The government ends up sending the company your refund, which repays the bulk of the loan, but the fees and interest may come out of your pocket, unless the company deducts it from the original loan amount. Though the convenience of getting your return sooner is worth it for some people, most experts and the US Internal Revenue Service advise against these loans unless you are in dire financial need, because the interest rates are so high.