TAX SEASON 2024
What is a tax refund advance and how does it work?
What you need to know about a tax refund advance and how to request one
Looking to get your tax refund early? Some tax preparation services offer a refund advance, which works like a type of loan that is distributed before the IRS has processed one’s formal return.
TurboTax, one of the largest companies in the tax preparation business, offers customers an advance worth up to $4,000 with zero interest.
There are three simple steps. The first is to file taxes using TurboTax or another software offering advance refunds and selecting “Refund Advance” when prompted. Then, you must create a Credit Karma Money account if you do not already have one.
One should be aware of the requirements to receive an advance on their refund:
- At least 18 years old
- Refund is expected to be greater than $500
- Not a resident of North Carolina, Connecticut, or Illinois
- You’re e-filing your federal tax return with TurboTax
- Your physical address is listed on your tax return. Your address must be located in one of the eligible states and can’t be a PO box or prison address
- You cannot use one of these forms when submitting your return: 1310, 4852, 4684, 4868, 1040SS, 1040PR, 1040X, 8888, or 8862
- Cannot be for a return submitted for a deceased taxpaye r
- You have a Form W-2, 1099-R, or Sched C
How long will traditional returns take to receive?
For those who opt to receive their tax refund directly into their regular bank account, it may take up to 21 days, as per the estimates released by the US Internal Revenue Service. This 21-day timeline applies to individuals who file their tax returns electronically and furnish the IRS with their direct deposit details.
You can track the status of your return using the IRS’ ‘Where’s My Refund?’ tool.
The IRS will begin processing tax returns on Monday, January 29th. If you submit your tax return during the weekend or early days of the week, you will be at the front of the line to receive your refund.
Taxpayers with an annual gross income of $79,000 or less are eligible to use free file software to submit their 2023 tax return. There are various partners that work with the IRS to offer this service, and you can use this quick survey to figure out which will suit your needs best.