Wal-Mart offers cash tax refunds

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Does your shopping list look like this: milk, bread, tax refund?

If you shop at Wal-Mart this tax filing season, it might.

Wal-Mart announced on Jan. 20, the day that the 2015 filing season officially began, that it has added a new financial service to its offerings: the ability to pick up your tax refund in cash at its stores nationwide.

Wal-Mart Direct2Cash is a refund option available at more than 25,000 tax preparation locations across the country, according to the retail giant. When a taxpayer files at these sites and chooses Direct2Cash, he or she will receive an email notification with a unique code as soon as their refund is available for pickup. Then the filer can head to the MoneyCenter or customer service desk at their local Wal-Mart store with the code notice and a valid ID to pick up his or her refund in cash.

“We know tax refunds can be one of the largest financial payouts of the year for many of our customers, and the last thing they want is to wait for their refund check to arrive and then spend money on unnecessary fees, in many cases upwards of $70, to cash it,” said Daniel Eckert, senior vice president of services for Wal-Mart U.S., in announcing the refund program.

Wal-Mart partnered with Tax Products Group, a Green Dot Company, and Republic Bank & Trust Company to offer the cash refund option. It works for both federal and state tax refunds.

Fast, but not immediate cash

Sounds easy, right? For the most part, it seems to be. But there are few things to consider.

First, if this option is of interest to you, make sure your tax preparer has the Direct2Cash software. That’s the only way you can get your cash refund via Wal-Mart.

Also note that while Wal-Mart isn’t charging a fee to hand over your tax cash, the preparers may. The maximum charge for the Direct2Cash option is $7, collected when you file your return.

If your refund is based on a jointly filed tax return, then both you and your spouse must show up in person and with ID to get the cash.

If you’re getting a big refund, you can’t use Direct2Cash. Wal-Mart will not distribute cash tax refunds that are more than $7,500.

Just a quick note from me: If your refund is that big, consider adjusting your payroll withholding so you can get at least some of that money throughout the year.

Finally, remember that you still have to wait for the IRS to do its job. It’s true that you’ll generally get your refund sooner if you file electronically, but it’s not an immediate turnaround. IRS Commissioner John Koskinen says his agency hopes to have most refunds out within 21 days of filing.

Benefits for unbanked and businesses

While the cash refund undoubtedly will be welcomed by many taxpayers, especially those who don’t have bank accounts, Wal-Mart isn’t offering the service just out of the goodness of its corporate heart.

You can bet the company hopes that taxpayers will spend some of their tax refund cash before they leave the stores.

Jackson Hewitt preparers operating out of more than 3,000 Wal-Mart stores nationwide this tax season also are likely fans of the cash refund plan. Many, if not all, of these in-store preparers will offer the Direct2Cash refund option.

While getting cash back from Uncle Sam via Wal-Mart definitely will attract a lot of folks, don’t let that end result unduly influence your tax filing choice. It might be better to get your return as usual if you can file your taxes for a low fee or at no cost whatsoever through the IRS’ Free File. Every taxpayer situation is different, so make sure your filing and refund choice is the right one for you.

Does the Wal-Mart cash tax refund option interest you? Let Bankrate know if you use it and how it works.

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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”