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Avoid these 3 tax-season rip-offs

Last updated: February 2013

Some tax preparers tack unexpected fees on your bill. Others might offer extra services that aren't worth the cost. Be on the lookout for these tax-season rip-offs:

Phony extra fees. Fees for "processing," "document preparation," and "service bureau" often are used to pad the preparer's bottom line. Ask for a fee list before you hire a preparer and avoid those who refuse to give you one.
Refund-anticipation loans. Often hyped as "instant refunds," RALs are basically short-term loans, at annual interest rates that can reach triple digits. They're uncommon now, but refuse if you're offered one.
Refund-connected debit cards. Your tax preparer might offer to load your refund onto a debit card. But the cards can be loaded with fees. H&R Block’s Emerald Prepaid Debit Master Card, for instance, charges $2.50 for an ATM cash withdrawal and $1 for an ATM balance inquiry. The over-the-counter withdrawal fee is $25 per transaction.

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