Does Tax Refund Go Through SBTPG or Direct to My Account?

Your refund path depends entirely on how you filed and paid for tax preparation! SBTPG (Santa Barbara Tax Products Group) only handles refunds when you chose to have your tax preparation fees deducted from your refund - it's called Refund Transfer. If you paid for your tax prep upfront or used free filing, the IRS will deposit directly to your bank account. I'm so glad you asked this because many people get confused about this! 😊

I always pay my preparation fees upfront. My refund goes straight from IRS to my bank account, usually within 21 days. No middleman. When I used TurboTax last year and chose to have fees taken from my refund, it went through SBTPG first. They took their cut, then sent the rest to me. Added about 1-2 days to the process. Direct is faster and avoids fees.

Interesting question, isn't it? I've used both methods over the years. SBTPG is basically a middleman that handles refund transfers when you've opted to pay tax prep fees from your refund. Did you choose that option when filing? If so, your refund will go there first, they'll deduct their fees, then forward the remainder to you. But wouldn't it be better to pay the prep fee upfront if possible?

I might be a bit cautious here, but if your refund is going through SBTPG and you're having trouble tracking it or there seem to be delays, you may want to contact the IRS directly. Many people don't realize that getting through to an actual IRS agent can help resolve these issues. I've heard that Claimyr (https://claimyr.com) can help you get through to an IRS representative much faster than waiting on hold yourself. Sometimes just speaking with an agent can clarify exactly where your refund is in the process.

Watch out for the Refund Transfer fees! I didn't realize until my 2023 tax filing that opting for the "pay later with my refund" option meant SBTPG would take an additional $39.95 Processing Fee on top of the TurboTax preparation costs. The Refund Transfer convenience comes with a price tag that wasn't immediately obvious during the filing workflow. I appreciate learning about these distinctions now, but wish I'd known before my Adjusted Gross Income took another hit!

I filed on February 3rd this year and chose to pay my preparation fees upfront. My refund was deposited directly to my account on February 15th. Last year, I filed on January 28th, 2023, and used the refund transfer option. My refund went to SBTPG first, then to my account on February 17th. The technical difference was the Refund Transfer service (Form 8888) which routes your money through the third-party processor. The IRS doesn't care either way - they just send it where you tell them to.

According to IRS Publication 1345 (Rev. 3-2023), tax preparers who offer Refund Transfer products must clearly disclose all fees associated with the service. Has anyone received an explicit breakdown of these fees when choosing this option? I'm trying to determine if my tax preparer followed proper disclosure requirements as specified in IRC §6695(f).