How to make the most of your tax refund

Simple tips on what to look for and what to avoid this tax season.

Use a Free Tax Site

IRS-approved volunteer tax preparation services may be available in your community. Visit to find a free tax site near you.

Avoid Rafund Anticipation Loans

Refund anticipation loans (RALs) are loans secured by and repaid directly from the proceeds of a consumer’s tax refund from the Internal Revenue Service (IRS). RALs are essentially high interest rate loans for borrowing one’s own money. The latest available IRS data indicates that RAL volume dropped significantly from 2008 to 2009, by about 14 percent. The drop in RALs is linked to measures put in place by the IRS and other regulators. For example, the IRS eliminated the (Debt Indicator), a service that helped tax preparers and banks make RALs by indicating whether a refund would be intercepted for certain debts; and JPMorgan Chase, one of the three largest RAL lenders, exited the market voluntarily. Finally, the FDIC notified the RAL-lending banks that it regulates that the making of RALs without the Debt Indicator is “unsafe and unsound.”

Plan ahead

Evaluate all debt and determine which bills must be paid right away. One method of prioritizing bills is to consider the interest rate of the debt. Interest is money you pay to use borrowed money, calculated as a percentage of the amount borrowed and paid over a specified time. Make every attempt to pay off high-interest debt first.

Determine an amount to save

The U.S. personal saving rate is 3.9, and is an improvement from the 2005 savings rate of zero; however, there is room for improving the personal saving rate. Many free tax sites offer a variety of options for saving during tax season from placing money from tax refunds directly into savings accounts to purchasing savings bonds. Find out more information about saving options during tax time at


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