1040-SR Understanding Tax Banks Advances: Pre-Acks vs. Post-Acks

Tax bank advances, often referred to as refund advances or tax refund loans, are short-term loans offered by certain financial institutions or tax preparers based on the expected tax refund a taxpayer will receive from the IRS. These advances are typically provided before the actual refund is issued, allowing taxpayers to access their refund funds more quickly.

In the world of tax preparation, especially during tax season, these advances can be an appealing option for individuals who need fast access to their refunds. However, it’s important to understand the nuances of these products, particularly the difference between pre-acknowledgments (pre-acks) and post-acknowledgments (post-acks).

Pre-Acks vs. Post-Acks: The Key Difference

1. Pre-Acknowledgment (Pre-Ack):

   • What it means: This loan is given before the IRS confirms your tax return. The tax preparer or lender gives you the advance based on the expected refund, assuming everything will go smoothly.

   • When to Apply: You can apply as soon as you file your tax return, usually starting in January.

   • Risk: Since the IRS hasn’t approved your return yet, there’s a small risk that it could be rejected or delayed.

2. Post-Acknowledgment (Post-Ack):

   • What it means: This loan is given after the IRS confirms that they’ve received and accepted your tax return. It’s a safer option since the IRS has already acknowledged your return.

   • When to Apply: You can apply after the IRS acknowledges your return, typically within 48 hours after filing.

   • Risk: Lower risk, since the IRS has already confirmed your return.

In short, pre-acks give you faster access to funds, but post-acks offer more security.

Step by step for adding advances Using TaxSlayer:

1040-SR Desk:

Interactive Demo, Try it now!

1. Start the Process

From the Summary Page of the return, go to Mark Return Electronic.

2. For TPG Bank: Choose RT with Advance : Select RT w/ Advance and choose the method of disbursement as shown in the options.

3. Pre-Acknowledgment (Pre-Ack) Option for TPG Bank

• The software will prompt you with a message asking whether the advances are pre-acknowledgments.

• Choose Pre-Acks if the advance will be issued before the IRS acknowledges the return.

4. E-File the Return : Now that the advances have been added, proceed with e-filing the return normally to submit it.

5. For Refund Advantage Bank: Choose RT with Advance : Select RT w/ Advance again and choose the method of disbursement as shown in the options..

6. Pre-Acknowledgment (Pre-Ack) Option for Refund Advantage

• The software will prompt you to choose whether the advances are pre-acknowledgments.

• Choose Pre-Acks if the advance will be issued before the IRS acknowledges the return.

7. E-File the Return :After adding the advances, proceed with the normal e-filing process for the return.

8. For EPS Bank: Choose RT with Advance : Select RT w/ Advance and choose the method of disbursement as shown.

9. E-File the Return for EPS Bank : Once the advances are added, proceed with e-filing the return normally to submit it.

1040-SR Proweb

Interactive Demo, Try it now!

1. Start the Process :From the sidebar, click on E-File.

2. For TPG Bank: Choose the Advances Option :From the drop-down menu, choose the advances option for TPG Bank, alongside the method of disbursement (how the taxpayer will receive their advance).

3. Choose the Advance Option for TPG Bank :Select the option With Finance Charge up to $7000 for TPG Bank.

4. For Refund Advantage Bank: Choose the Advances Option

• From the drop-down menu, choose the advances option for Refund Advantage.

5. Choose the Advance Limit and Type

• Choose the advance limit and type from the drop-down menu (e.g., $1000, $2000, etc.).

6. Pre-Acknowledgment (Pre-Ack) Option for Refund Advantage

• To apply for pre-acknowledgment (pre-ack), make sure to select Yes from the drop-down menu

7. For EPS Bank: Choose the Advances Option

• For EPS Bank, choose EPS Advance from the drop-down menu.

• Select the method by which the taxpayer will receive their advances.

8. Choose the Finance Program for EPS Bank

• Choose the desired finance program from the EPS Advance drop-down menu

9. Continue the E-Filing Process

• Once all the advances are added, click on Continue and proceed with the normal e-filing method to submit the return.

FAQ:

1. What is the maximum amount I can receive through a tax bank advance?

The maximum amount varies depending on the bank and the taxpayer’s refund. Some banks may offer advances up to $7000 or more, while others may have lower limits. You can choose the advance limit during the application process.

2. Are there any fees associated with tax bank advances?

Yes, tax bank advances often have fees, which can vary depending on the bank and the advance amount. Make sure to carefully read the terms and conditions before applying to understand all associated costs.

3. How long does it take to receive the advance?

• Pre-Ack Advances: Can be disbursed within a few business days after filing, depending on the bank.

• Post-Ack Advances: These are generally disbursed within 24-48 hours after the IRS has acknowledged your return.

4. Can I change my advance application after submission?

Once submitted, changing the advance application may not be possible. Contact us to discuss any changes you’d like to make. Adjustments may be allowed in some cases, depending on the bank’s policy.