Get your tax refund fast, or get it ALL

NORFOLK, Va. - It's that time of year -- tax time! By now, you have your W-2 and the rest of your forms, now you want your refund. You've seen the ads: get your tax rebate earlier rather than later. It sounds great, but once you've got that cash in your hand, can you really afford to have it there?

Refund anticipation loans or RALs allow eligible customers to receive part, or all of their tax refund in as little as a day, BUT at a cost.

"If you get a refund anticipation loan, you are borrowing money from a bank. You are basically borrowing your own money," said Chi Chi Wu of National Consumer Law Center.

In 2007, about 9 million taxpayers took out an RAL, and paid about $900 million in fees. Fees do vary, but a $2,600 RAL can cost about $135 in fees, money that would otherwise go into your wallet if you waited 8 to 10 days for an electronic direct deposit.

When the interest is annualized, taxpayers end up spending 50 to 500 percent interest on refund anticipation loans.

H&R Block and Jackson Hewitt are popular RAL providers. H&R block says their RAL option "At 2 percent of the refund, costs less than a bank overdraft, a credit card advance or, in some cases, using an ATM."

And Jackson Hewitt says that some consumers "may have a need for quick access to funds. To meet a timely expense, an RAL may be a viable financial option."

Most RAL customers, 84 percent of them anyway, had an income of less than $40,000 a year.

"These are families that work hard and generally have kids. They need every penny of the refund they are getting back from the government," said Chi Wu.

If you choose an RAL, shop around for the lowest fee. And if you're willing to wait a few days, you may be able to get your tax refund for free. If you made less than $56,000 last year, you can file your federal tax return for free online at www.irs.gov . And in 23 states, and Washington, DC, you can file your state tax return for free online.