Q&A of the Week January 3, 2024

Question

What is an RAL?

Answer

RAL stands for Refund Anticipation Loan. At this time of year, when taxpayers are trying to pay for holiday gifts, tax professionals are more frequently asked about RALs.

With an RAL, you pay a high fee in order to get your expected tax refund faster. Once you receive your refund, you pay back the money you borrowed through the RAL.

An RAL is offered by some tax preparers and is controlled by a contract. A lender gives you an advance based on your anticipated tax refund. The IRS is not involved with RALs. 

Here is a helpful article about RALs: https://www.taxgirl.com/2020/01/26/what-you-should-know-about-tax-refund-anticipation-loans/