It's tax season, and for many, the promise of a tax refund is a welcome thought! However, for those using TurboTax, a common point of contention arises: the "refund processing fee." This fee, often a surprise to users, can feel like an unnecessary bite out of your anticipated refund. But fear not! This comprehensive guide will walk you through exactly how to avoid or remove this fee from your TurboTax return.
Understanding the TurboTax Refund Processing Fee
Before we dive into the "how-to," let's clarify what this fee actually is. The refund processing fee, typically around $40-$50 (it can vary by state, sometimes up to $45 or more in California), is not a fee charged by the IRS or your state tax agency. Instead, it's an additional charge from a third-party bank that processes your TurboTax payment when you choose to have your TurboTax fees deducted directly from your federal (and sometimes state) tax refund.
Think of it this way: instead of paying TurboTax upfront with your own credit or debit card, you're essentially asking a bank to front the money for your TurboTax services, wait for your refund to come in from the IRS, take out both the TurboTax fees and their own processing fee, and then send you the remainder. This convenience comes at a cost – that extra processing fee.
The good news is that this fee is entirely avoidable!
Step 1: Are You Eligible to Remove the Fee? Let's Find Out!
Before you start clicking around, let's determine if you're even in a position to remove this fee. This is the most crucial first step, as the timing of your action matters significantly.
Have you already e-filed and had your return accepted by the IRS?
If YES, I'm afraid to tell you that it's likely too late to remove the refund processing fee. Once your e-filed return is in "pending" or "accepted" status, the payment method has been locked in with the third-party bank.
If NO, meaning your return is still in progress, hasn't been e-filed, or was rejected by the IRS, then you are in luck! You absolutely can remove this fee. Proceed to Step 2!
Is your return still being prepared, or have you only just started?
If YES, fantastic! You have full control over your payment options.
If NO, and you've already clicked through the filing steps, but it's not yet accepted, you still have a window of opportunity.
The key takeaway here is: Act before your return is accepted by the IRS.
Step 2: Navigate to Your Payment Options (The "File" Section)
Assuming your return hasn't been accepted yet, your next move is to find the payment options within TurboTax. The exact navigation might vary slightly depending on whether you're using TurboTax Online or the Desktop/CD version, and the specific year's interface, but the general principle remains the same.
For TurboTax Online Users:
Open or continue your return. Log in to your TurboTax account and access the tax return you are currently working on.
Look for the "File" section. This is usually located in the left-hand navigation menu or at the top of your screen, depending on the current interface. Click on "File."
Proceed to the "Just X more steps" screen. As you navigate through the filing process, you'll reach a screen that summarizes the remaining steps before you can e-file.
Locate the payment option. On this "Just X more steps" screen, you'll see an option related to how you've chosen to pay for your TurboTax fees. It might say something like "You've chosen to deduct your TurboTax fees from your federal refund."
Select "Revisit" or "Change Payment Method." Next to the fee deduction option, there will be a "Revisit" or similar button. Click on this to modify your payment choice.
For TurboTax Desktop (CD/Download) Users:
Open your tax file. Launch the TurboTax software on your computer and open the tax file you are working on.
Go to the "File" tab. In the software's menu bar at the top, click on the "File" tab.
Navigate through the e-filing steps. You'll be presented with various screens guiding you through the e-file process. Proceed slowly and carefully.
Find the payment screen. You will eventually reach a screen that presents your payment options for the TurboTax fees. This is where you'll make your crucial change.
Step 3: Choose an Alternative Payment Method (The Core Solution!)
This is where you directly remove the refund processing fee. Instead of opting for "Pay with My Refund," you need to choose an alternative method to cover your TurboTax fees.
Sub-heading: The Golden Rule: Pay Upfront with a Credit or Debit Card
On the screen where you are presented with payment options, you will typically see two main choices:
"Pay with Federal Refund" (or similar phrasing, which incurs the processing fee)
"Pay now" or "Pay with Credit/Debit Card" (this is the option you want!)
Select the "Pay now" or "Pay with Credit/Debit Card" option. This will allow you to directly enter your credit or debit card details to pay for your TurboTax product.
Complete the payment. Enter your card information and finalize the transaction.
Important Note on State E-File Fees for Desktop Users: If you are using the desktop version and previously selected to pay for your state e-file fee from your federal refund, this is where the refund processing fee often gets tacked on. By choosing to pay the state e-file fee upfront with your credit or debit card, you will avoid the additional refund processing charge. You can also avoid the state e-file fee entirely by choosing to print and mail your state return instead of e-filing it.
Step 4: Verify the Fee Removal
After you've changed your payment method and completed the transaction (if paying upfront), it's critical to double-check that the refund processing fee has indeed been removed.
For TurboTax Online Users:
Return to the "Just X more steps" screen. After successfully paying with your card, navigate back to this summary screen.
Confirm the payment status. Step 1 on this screen should now indicate that you have paid with your credit or debit card or that the fees have been covered, and the wording about deducting fees from your refund should be gone.
Review your final summary. Before truly e-filing, many users find it helpful to go to the "Review" section and check the final summary of their fees to ensure the refund processing charge is no longer listed.
For TurboTax Desktop (CD/Download) Users:
Continue through the "File" tab. After paying with your card, continue through the filing steps.
Observe the final fee breakdown. The program should present a final breakdown of your TurboTax fees before you commit to e-filing. Make sure the refund processing fee is absent from this list. If you chose to print and mail your state return, confirm that the state e-file fee is also not present.
Step 5: What If Your Return Was Rejected? Take Action!
If you e-filed your return and it was rejected by the IRS (or state), this is your golden opportunity to remove the fee.
Access your rejected return in TurboTax.
Make any necessary corrections that caused the rejection.
Before re-filing, go back to the "File" section as described in Step 2.
Change your payment method to pay directly with a credit/debit card, as detailed in Step 3.
Re-e-file your corrected return.
Important Considerations & Pro Tips
Timing is Everything: As reiterated, the absolute best time to avoid this fee is before you e-file your return.
Review Your Fees Carefully: Always take a moment to review the breakdown of all TurboTax fees before you finalize your payment and file your return. TurboTax often offers add-on services (like MAX Defend & Restore, PLUS Help & Support, etc.) that can also increase your overall cost. You can deselect these if you don't need them.
Consider Lower-Cost Options: If the fees are still too high, consider if a different TurboTax product (e.g., Deluxe vs. Premier) or even the Free Edition would suffice for your tax situation.
Print and Mail State Returns: For desktop users, remember that printing and mailing your state return can often save you the state e-file fee, which in turn removes any associated refund processing fee if you were planning to pay that fee from your refund.
Don't Rush! The screens can be deceptively quick to click through. Take your time, read all the options, and ensure you're making the choice that saves you money.
By following these steps, you can effectively take control of your TurboTax fees and ensure that your hard-earned refund isn't chipped away by an avoidable processing charge!
10 Related FAQ Questions
Here are 10 frequently asked questions about TurboTax fees, starting with "How to," along with their quick answers:
How to see my TurboTax fees before filing?
Quick Answer: In TurboTax Online, go to "Tax Tools" (usually on the left menu) and then "Tools." A pop-up will appear, and you can select "My Fees" to see a breakdown. In desktop, look for a fee summary within the "File" section.
How to avoid all TurboTax fees?
Quick Answer: Use TurboTax Free Edition if your tax situation is simple (e.g., only W-2 income, standard deduction, no complex investments or deductions). You can also look for free filing options from other providers if your return is still simple but doesn't qualify for TurboTax Free Edition.
How to remove add-on services from my TurboTax return?
Quick Answer: Before e-filing, navigate back through the "Review" or "File" section where services are offered. You should see options to deselect or remove unwanted add-ons like "MAX Defend & Restore" or "PLUS Help & Support."
How to pay for TurboTax without using my refund?
Quick Answer: Choose the "Pay now" or "Pay with Credit/Debit Card" option during the filing process, typically found in the "File" section when you're selecting how to pay for the software.
How to get a refund for TurboTax fees if I didn't use the service?
Quick Answer: You would need to contact TurboTax customer support directly. Refunds are typically handled on a case-by-case basis and depend on their refund policy and whether the service was used or the return was filed.
How to know if my TurboTax return was accepted?
Quick Answer: TurboTax will send you an email notification once your return has been accepted by the IRS (and state, if applicable). You can also check the status directly within your TurboTax account online.
How to pay for my state e-file fee without the extra processing charge?
Quick Answer: When prompted to pay for the state e-file fee, select to pay directly with a credit or debit card instead of having it deducted from your federal refund.
How to avoid the state e-file fee entirely in TurboTax Desktop?
Quick Answer: Instead of choosing to e-file your state return, select the option to print and mail your state return. This will bypass the e-file fee.
How to switch from TurboTax Online to Desktop and avoid fees?
Quick Answer: If you started on TurboTax Online, you can often download your tax file to continue on the desktop software, which may have different pricing. However, you might still need to purchase the desktop software and its associated state modules. Ensure you haven't already paid for the online version.
How to get my refund faster after removing the processing fee?
Quick Answer: The fastest way to receive your refund is to e-file your federal return and choose direct deposit into your bank account. Removing the refund processing fee ensures the refund goes directly to you from the IRS, rather than through a third-party bank.
