What is a refund transfer?

A refund transfer is a service offered by tax preparation companies that allows taxpayers to have their tax preparation fees deducted from their tax refund. This means that taxpayers do not have to pay for tax preparation services upfront, but instead, the fees are taken out of their refund when it is issued.

The tax preparation company will set up a temporary bank account for the taxpayer’s refund to be deposited into. Once the refund is deposited into this account, the tax preparation fees are then deducted from the refund and the remaining balance is deposited into the taxpayer’s bank account, or sent to them via a prepaid card or check.

Refund transfers can be a convenient option for taxpayers who do not want to pay upfront for tax preparation services. However, it is important for taxpayers to carefully review the fees associated with refund transfer services, as they can be expensive and may reduce the overall amount of their tax refund.