TurboTax is a popular tax filing software package. It also offers quick tax refunds with the TurboTax debit card, or Turbo Card. There are several versions ranging from a free online basic TurboTax edition to a Home and Business TurboTax and more. They all in work in pretty much the same way. The software guides the user through a bunch of fill in the blank entry screens and does all the math and complicated tax worksheets automatically behind the scenes.
For a great many Americans, using TurboTax software is just as good as paying an accountant to file taxes. But, watch out for TurboTax debit card fees if you get your refund on the TurboTax card, called the Turbo Card this year.
Turbo Tax Debit Card Refund
At the end of the Turbo Tax filing process, the software offers users the ability to get their tax refund via a prepaid Visa card, which is kind of like a TurboTax debit card. The Turbo Card is a Visa card offered through Green Dot Bank. Green Dot Bank is most familiar for its reloadable debit cards you can buy at 7-11 and other places, especially drug stores.
There are two options for a faster refund. One is a TurboTax Refund Advance, which is really a loan against your income tax refund. This is not like the Rapid Refund scams of years gone by. There are no up-front fees, and there is no interest on the loan. The TurboTax advance is available for a percentage of you refund amount, no more than 50%. That being said, the whole thing borders on being a TurboTax Refund Card scam.
Like all legitimate businesses, Intuit, maker of TurboTax, covers itself in a sea of fine print and disclosures buried deep beneath the suggestion that this refund method is actually advantageous for the taxpayer filing their taxes. So, technically, everything is on the up and up. However, chances are you’ll be better off by getting your refund a different way.
The most important TurboTax card trick is that your whole refund will be deposited onto your TurboTax card even though you will only get up to 50% in advance. If you are getting a $1,200 refund, the maximum refund advance amount is $500. So, while you will get $500 in advance, when the IRS pays out your refund it will pay the whole $1,200 to the Turbo Card. TurboTax will then deduct the $500 advance.
Your Turbo Card refund looks like this:
- $500 put on the TurboTax Visa debit card right away.
- $700 put on the TurboTax card when your refund comes through from the IRS.
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The good news that you can get that part of your refund fast. TurboTax deposits your refund advance money on your debit card in just a few minutes, and then emails you a “virtual card” that you can use right away. A virtual card is just a credit card number, expiration date, and CVC code. This will work like a champ for payments online, but don’t expect anyone to take it in person based on your word that it is real.
Even when you get your real TurboTax debit card, it is important to remember that it still is not the same as cash. You can’t use a debit card to pay your credit card for example. You can use things like Venmo or Zelle to send money to friends and family. You can use your debit card at stores, and to pay bills that allow payment via credit cards.
Despite the Visa logo on the card, there is no credit card feature to the refund card. Rather, the card is the same thing as a Turbo Tax debit card, but instead of a bank account, it has the funds from your IRS refund. For those of you who don’t have much experience with prepaid credit cards, it works the same as a debit card only instead of being attached to a checking or savings account at your bank, funds are attached to the card itself. It is very much like a gift card with a prepaid amount on it. The difference is that you can refill it.
Many merchants have similar setups. I have a Starbucks card that works just like this, only it doesn’t have the sneaky fees that push this card from being a legit card to being very close to being a scam.
Remember, gas stations do weird things with debit cards if you pay at the pump, so be careful when using it that way.
TurboTax Debit Card Fees
Of course, the devil is in the details. In this case, the devil is in all the fees for the TurboTax Refund card. The first month you have the TurboTax Visa Refund card, there is no monthly charge. This year, there is no monthly fee for the TurboTax debit card. That is one the Turbo Card pros.
Next up is the fee for cash withdrawals. This is the big TurboTax Card con as people try and turn their Turbo Card into cash. Remember your whole refund gets deposited onto the TurboTax card, even though you only get up to 50% of your refund in advance. Using an ATM withdrawal to get cash from your TurboTax card is free, but only if you use an in-network ATM. If the ATM charges you fee, TurboTax does not refund your cash advance fees.
Turbo Card Direct Deposit
TurboTax offers a fast refund via its ASAP Direct Deposit. Even if you don’t get a refund cash advance from TurboTax, you can still have your refund deposited on your Turbo Card. TurboTax says that you can get your refund up to two days faster this way. Essentially, this is a difference in processing the ACH from the IRS. Your bank will wait until the funds are in your account, and then may wait up to 24-hours to give you access to those funds depending upon your bank’s deposit policies.
TurboTax knows that the IRS is good for it, and will put your refund on your TurboTax Card right away instead of waiting for the actual funds and then processing them before making them available to you.
Is Turbo Tax Refund Card Worth It?
While the TurboTax debit card is legit, it is not a good deal for most taxpayers that have a bank account.
If you already have a bank account, just have your refund direct deposited by the IRS into your checking account. It will be just as fast as having it sent to a Turbo Tax card, and chances are you already have plenty of ways to access your money ranging from an existing debit card, to checks, ATM cards, and even teller withdrawals, all without having to worry about tripping over any additional fees or expenses.
If you do not have a bank account, the TurboTax Refund Card will get you your refund faster than waiting for a check from the IRS. Another option is to withdraw the whole amount in one ATM transaction. That first one is free, but remember there is a daily limit to how much you can withdraw. If it will take you two withdrawals (or more) to get all of your cash, be sure to leave at least $50 on the card to avoid the monthly charge. Otherwise, your refund could disappear quickly in a sea of fees.
If the money isn’t burning a hole in your pocket, consider just waiting for the check. (Update: Stimulus payments are being sent automatically, and fastest, to tax payers that provide direct deposit information for their refunds. Consider getting a bank account and using that information so that you may be better set up to get any future stimulus checks, or other government payments.)