Beware of tax agents who claim to offer you an ‘instant tax refund’. What they’re really offering is a high-interest, short-term loan that can leave you seriously out of pocket if you’re not careful.
Having to wait up to 14 days to get your tax refund back can be painful. But there’s actually no such thing as an ‘instant tax refund’ – and you should really be wary of any tax agents that claim to offer this.
What these tax agents are doing is actually lending you money against your tax refund, typically with them skimming as much as 20% off your expected refund, and then charging you additional interest and fees if you’re not able to pay the loan back in full when your tax refund comes back. If your tax refund is delayed for whatever reason, then you could actually end up owing the tax agent money.
Doing a Google search on ‘instant tax refunds’ reveals more than a dozen shonky operators who offer a “tax refund” either within the hour or on the same day.
Etax Accountants has a chilling example of how this could all go pear-shaped and leave you owing the tax agent. The case study got an ‘instant tax refund’ of $1,000, but due to delays with the ATO, he ended up owing the tax agent $1,694 in fees and interest in addition to the $1,000 he got in the tax refund.
Clearly, patience is a virtue. The moral of the story is that you should wait for your tax refund to come back before you start spending it. You’re best off investing in a good tax agent who will lodge your return for you quickly and correctly so that there are no unnecessary hold-ups with the ATO.
Lodge your tax return with a trustworthy, family-run accounting firm that has been servicing the community for more than 30 years. Book an appointment with Colby Business Services today.