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Lv 7
asked in Business & FinanceTaxesUnited States · 4 months ago

why do services like TurboTax and H&R Block have the IRS send the money to THEM? is that normal?

shouldn't the IRS just send the money directly to ME?

or would it be the same if i hired a local person to do my taxes?

Update:

what fees are you guys talking about? it's FREE every year for me...

Update 2:

@Judy:

i have never once paid for filing taxes. in the end of it all, it always says:

Federal: $0

State: $0

Total: $0

as long as you make less thatn $72,000 per year, it's FREE through this link:

https://www.irs.gov/filing/free-file-do-your-feder...

btw, NONE of you has answered my question!

6 Answers

Relevance
  • 3 months ago

    Sorry that I reply here but I didn't know any other way. You are naive to think that mafia will simply cage themselves in order to hide from government. There's many colourful ways to to get invisible. I suggest you check out the NCS once in a while.

  • ?
    Lv 7
    4 months ago

    I do Turbo Tax, money comes directly to me.  YOU elect to have it come to them when you elect to get their refund card or whatever.  You can have it done direct to your checking account.

  • Judy
    Lv 7
    4 months ago

    WHAT is free?  getting your taxes done?  No it's not.  They're keeping some of your refund to pay for it, probably around $100 or more.

    edit:  you hadn't mentioned that you're using freefile. Then you're right that federal is free to file.  There is usually a charge for filing state even if you use freefile, but there are  exceptions.  If they are sending you all of your state withholding in addition to all of your federal withholding, then there is no reason for them to run your refund through them other than that they decided to do it that way.

  • 4 months ago

    Tax software and in-person tax preparers do this so that they can deduct fees (or loan repayments) directly from your refund for customers who choose not to pay for their services upfront. Keep in mind that in many cases the federal return is free but there is a fee for filing the state return.

    Its also used so they can deliver your refund to you in the format you requested. For example if you want the money put onto a debit card they create a bank account to hold the money with the debit card linked to that account.

    Or if you want a paper check, but don't want to wait the extra couple weeks for the IRS to mail it to you - places like H&R block or Liberty tax service can get direct deposit to an account on your behalf then print a check for you the same day in their office.

    So even if your return is free it would be directed to an account at the tax software or tax preparer's partner bank if you used one of the other services like a debit card or same-day check.

    If you don't use any of those services and pay for the software program upfront, then the money will go straight from the IRS to your bank account.

  • Anonymous
    4 months ago

    Because those services subtract their service fee from your refund.  It's how they get paid.

  • 4 months ago

    If you chose to have any fees withheld from your refund, the IRS does not have your direct deposit info.

    On your original return, the direct deposit info is that of HRB's or TT's bank.  They get the the money first to withhold fees.  They then send the difference to you. 

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