Most of us begrudgingly accept any fees for filing taxes, but it turns out many people are actually overpaying if they choose to have the cost deducted from their return. In fact, you're better off paying with your debit or credit card.
Companies like TurboTax, H&R Block, TaxAct, and TaxSlayer will charge you an extra processing fee if you choose to have your filing costs deducted from your return. For TurboTax specifically, you'll owe an extra $39.99. And while it makes sense that companies would charge for this service (it's more work for them after all, even if it's just pressing a button), what's frustrating filers most is that they weren't clearly told that they wouldn't be subject to this unexpected surcharge if they opted to pay with a credit, debit, or pre-paid card.
TurboTax can remove this charge, called pay-with-your-refund or Refund Processing in their program, but only if your filing meets certain conditions. If your e-filing is in "pending" or "accepted" status, you can kiss your $39.99 goodbye.
Paying filing fees may be another unwelcome strain on your wallet, but you'll save money in the long run if you put it on the card rather than checking the pay-with-your-refund box. Or better yet, opt for a service that lets you file your taxes for free.
There are plenty of programs out there that will let you file for no cost. Taxpayers who earned $66,000 or less last year are eligible for the IRS’s Free File program, which covers both state and federal taxes. Credit Karma Tax files state and federal taxes for free, and federal filings through FreeTaxUSA will cost you nothing (state filings are $12.95).
Tax-filing season can seem complicated and expensive — but it doesn't have to be. In reality, you and your refund can make it through April unscathed.