Taxes
TurboTax Users and the Economic Stimulus Payment
I’ve been getting a lot of angry comments on my earlier post (”Where’s My Refund“) regarding the payout of the economic stimulus package. Many people are upset they haven’t received their payment even though they filed on time and with direct deposit.
While there are a number of factors that could slow your payment down (the IRS was delayed in processing your return, there was an error on your return, or the IRS just doesn’t like you) there is a new one I found out about yesterday: TurboTax.
Apparently, if you used TurboTax to file your taxes, you may get a paper check in the mail - regardless of whether or not you chose to get your income tax refund by direct deposit.
From the TurboTax support site:
Under certain circumstances, however, the IRS has decided that taxpayers can only get their rebates by mail, even if they get their refunds by direct deposit. At TurboTax, this will happen if you use a “refund transfer” when filing your 2007 return. This service lets you pay for your tax preparation and/or e-filing from your refund proceeds, for an additional fee, under an agreement with Santa Barbara Bank & Trust .
What does this mean for you and me? Well, if you used TurboTax’s “refund transfer” option you’ve actually made two mistakes.
1. You actually paid money for a “refund processing fee” which for everyone else was absolutely free. Since the government did the “processing” of the economic stimulus payment based on your 2007 return (for free)… you just got scammed by TurboTax.
2. You also paid $30 to Santa Barbara Bank & Trust to “loan” you the money for your TurboTax preparation fees. When your refund comes, it goes to Santa Barbara Bank to satisfy your “debt” before you get what’s left over. This is where you got, um… screwed. Since your banking information was used only for the transaction between Santa Barbara Bank and you, it wasn’t passed on to the IRS.
As a result, the IRS can’t direct deposit your stimulus payment even if it wanted to… because it doesn’t have your banking information.
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I posted my story on how I find this out from the IRS on my website. Check it out! basicfinancial.blogspot.com
I posted my story on how I find this out from the IRS on my website. Check it out! basicfinancial.blogspot.com
I sent an e-mail to Intuit voicing my frustration and threatening to never use Turbotax again and received a reply back stating that they would refund my $29.95 processing fee. I gave them a call using the instructions given, gave them a bit of identifying info and the refund should show up in 5-7 business days they said. Score!
[…] if you used TurboTax to file your taxes, you may get a paper check in the mail - regardless http://beancounterblog.com/2008/05/17/turbotax-users-and-the-economic-stimulus-payment/Read “who else got a message that turbotax is following them on twitter? heres what I have to say. […]