Local group warns of risks with refund anticipation loans

By Zaneta Lowe  - bio | email | Twitter

COLUMBUS, GA (WTVM) - "I didn't know how much they were taking, all I knew was what I was getting back," says local resident Jamekia Coaxum.

It turns out, though, Coaxum may have left some money on the table when she turned to a pawn shop to file her 2008 tax return.

"I got an anticipation loan in the amount of $300, but what I didn't know, was in the long run, it was gonna hurt me when I got my taxes back," explains Coaxum.

Coaxum says she had no idea about the fees and percentages that go along with Refund Anticipation Loans.

Plus, her refund fell short last year because she didn't get the maximum amount, which she's likely eligible for, in the Earned Income Tax Credit.

"The amount of my refund was about $3500, so over $2000 that I lost out on because I wanted to get money ahead of time, adds Coaxum.

It's stories like Coaxum's that members of the Volunteer Income Tax Assistance Coalition want to share with the public.

They're hosting classes to educate residents on the risks of RALs.

"What we're finding is that Muscogee County has one of the highest rates of people using refund anticipation loans in the entire United States," says Kari Finley of Goodwill Industries, an agency that's part of the VITA Coalition.

She says this means taxpayers are being charged higher rates for their returns, and missing out on money when it comes to the Earned Income Tax Credit and Child Tax Credit.

"There's actually more than $65 million of unclaimed money right here in Muscogee County," says Finley.

Which is why they're asking taxpayers to wait.

"Do not take your last paycheck to one of these places and get your tax return done before the end of the year, you're losing out on a lot of money," explains Finley.

Coaxum says that's exactly what she plans to this year.

"What's $300 compared to losing out on over $2000."

VITA will provide free tax preparation for folks who earned less than $49,000 in 2009.

For more information, call 706-324-4366, or visit www.vitainthevalley.com.

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