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Level 2

Question

$40 Refund Procesing Service Fee

Forum|Forum|2 years ago
February 7, 2024
13 replies
80 views

Can anyone figure out why Turbo Tax Deluxe is now charging a $40 Refund Processing Service Fee when you go to file your federal tax return? I paid for Turbo Tax Deluxe, the agent on the phone hung up on me when he couldn't answer when I pushed pack for detail. Before hanging up, he said there is a form you can submit to get a refund of the $40 refund fee- but the website doesn't say that anywhere. How do many thousands of consumers know about that unless they take the time to call? I have been using Turbo Tax for years, always have a refund and have never been charged a processing fee for the refund before. As far as I know - the IRS processes the refund- not TT. Does anyone have any insight as to why this is being charged?

xmasbaby0

Level 15

There has been a $40 refund processing fee in effect for many years when you choose to pay your TurboTax fees by having those fees deducted from your federal refund. If you owe any sort of fees for using TurboTax and you choose to have those fees deducted from your refund instead of paying upfront with a credit or debit card, you are agreeing to have the IRS send your refund to a third party bank. That third party bank takes out the amount you owe to TurboTax, pockets the $40 fee, and sends the rest of your refund to you.

BEFORE you file, you can remove that refund processing fee and pay using your own credit or debit card.

What is Refund Processing Service?

REMOVE REFUND PROCESSING FEE

https://ttlc.intuit.com/questions/1900517-how-do-i-remove-refund-processing-fees-in-turbotax-online-and-change-my-payment-method

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Bolt24Author

Level 2

Thank you for clarifying. I chose to pay my electronic state filing fee by credit card and that cleared it. However the "Refund Processing fee" is a misnomer - the fee pertains to me having my state E-Filing fee deducted from my refund. It has nothing to do with processing a refund. They need to change the name or be more descriptive as it's confusing.

xmasbaby0

Level 15

Users of desktop software always need to be aware of the state e-filing fee. The software may include the program to prepare a state return, but there is a fee to e-file the state. That fee is $20 prior to March 1; as of March 1 it increases to $25. You can avoid the state e-file fee by printing and mailing the state return.

But.....if you choose to pay that $20 from your refund instead of just paying it with a card before you e-file, you have just tripled the cost of e-filing your state return.

Beaverl

Level 2

I notice this also and will have further questions about it as I advance toward filing. My problem is that when i select to pay the State filing fee by Credit Card, I only am presented with my Mailing information but with no option to advance to entering CC details. The option to have the state fee deducted from federal refund leads to a lengthy legal document and the $40 fees. I may end up printing and mailing my State return.

CatinaT1

Level 15

Try disabling your main internet browsers pop up blocker before getting to the payment page.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

frv

Level 2

What are you jerks charging this fee for what is suppose to be a free fed filing? Never again. I will go to another package. This is wrong and costly... to you because I just saw on X that people are outraged. Never again, dude. I will never again purchase your software after 10 or more years of use. Good day.

xmasbaby0

Level 15

@frv

WHY DO I HAVE TO PAY? I WANT THE FREE EDITION

The information that you can enter in Free Edition is pretty limited now. Thanks to the new tax laws that began for 2018 returns, there are no more simple Form 1040EZ or 1040A's. Everything goes on a Form 1040 that has three extra "schedules" with it, and if you need any of those schedules, you are not able to use the Free Edition. Using the standard deduction instead of itemizing does NOT mean you will not need any of those schedules.https://ttlc.intuit.com/questions/4511011-what-happened-to-the-1040a-and-1040ez If you started in the Free Edition and entered any data that required any of those three schedules, you have to upgrade to a paid version and if you are watching the screens carefully you are alerted to the upgrade.

When you chose to “start” in the Free Edition —

Directly below the words “Free Edition” there is a blue link that says “For simple tax returns only” If you click that link it brings up this information:

You can file with TurboTax Free Edition if you have a simple tax return.*

*A simple tax return is Form 1040 only.

Situations covered in TurboTax Free Edition include:

W-2 income
Limited interest and dividend income reported on a 1099-INT or 1099-DIV
Claiming the standard deduction
Earned Income Tax Credit (EIC)
Child tax credits
Student Loan Interest deduction

Situations not covered in TurboTax Free Edition include:

Itemized deductions
Unemployment income reported on a 1099-G
Business or 1099-NEC income
Stock sales
Rental property income
Credits, deductions and income reported on schedules 1-3

How does TurboTax make any money?

Customers with more complex tax situations will file with our paid TurboTax products that provide all the additional forms and guidance they need. We also offer additional benefits that go beyond filing your taxes, but they are optional and are not required to file simple taxes for free. We hope that, over time, as our customers with simple returns need more capabilities as their financial situations change (for example owning a home, having a child, managing investments), they have loved our products and services so much that they will choose our paid TurboTax offerings to prepare and file their returns.

Or—-Use this IRS site for other ways to file for free. There are 8 free software versions available from the IRS Free File site

https://apps.irs.gov/app/freeFile/

Or—if you live in certain states you may be eligible to use the new IRS Direct File

( AZ, CA, FL, MA, NH, NV, NY, SD, TN, TX, WA, WY )

https://directfile.irs.gov/

How can I see my TurboTax fees?

https://ttlc.intuit.com/questions/2565973-how-do-i-review-my-fees-in-turbotax-online

If your TurboTax fees are higher than expected, you can reduce them by removing add-ons (BEFORE you e-file) :