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Wisconsin CUs urging tax filers to use quick options
PEWAUKEE, Wis. (4/1/09)--Wisconsin credit unions are encouraging tax filers to use direct deposit when receiving their tax returns. When paired with state and federal electronic filing options, this method can deliver tax refunds within days. Consumers can open a basic savings account at a credit union for as little as a $5 deposit. “Although we’re approaching the end of tax season, Wisconsin consumers still have free options available that can save time and money--especially if you’re filing a simple tax return,” said Brett Thompson, president/CEO of the Wisconsin Credit Union League. “Even for those who get assistance from a tax preparer, there’s no need to pay additional fees to get a refund quickly.” Wisconsin credit unions have assisted at volunteer return preparation sites throughout the state this tax season, operated in partnership with the Internal Revenue Service, the state Department of Revenue and AARP. The sites offer free tax preparation, tax education and asset-building strategies, and help filers claim their full refund by using direct deposit. Many filers think the only way to get their refund quickly is through paid preparation firms that charge excessive fees, said the league. Thompson said short-term, high-interest loans like refund anticipation loans (RALs) are heavily marketed during tax time and can drain hundreds of dollars from a typical refund. These loans cost Wisconsin tax filers $21.8 million in 2006--the most recent year for data--in exchange for the promise of a fast refund. Data show that RAL usage increases considerably among Wisconsin taxpayers eligible for the Earned Income Tax Credit (EITC)--a credit for low to moderate-income filers. Nearly 18% of EITC filers use RALs to receive their refunds, compared with 3.4% of all Wisconsin tax filers. EITC-qualifying tax filers who use RALs lost $13.7 million in 2006.
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