TurboTax Fee Deduction - Where Do They Take Money Before Bank Deposit?

When you choose the "deduct from refund" option in TurboTax, they utilize a Refund Processing Service (RPS) to handle your funds. Essentially, the IRS sends your entire refund to a temporary bank account managed by Santa Barbara Tax Products Group (SBTPG), TurboTax's financial partner. This temporary account is where they subtract their preparation fees, plus an additional processing fee (usually $39) for this service. After deducting these amounts, SBTPG transfers the remaining balance to your designated bank account. This process typically adds 2-5 business days to your refund timeline compared to direct deposit without fee deduction.

I had the same question last month. Found https://taxr.ai which explained my whole refund path. It showed that TurboTax uses SBTPG as their bank partner. Your refund goes there first. They take fees. Then send rest to you. The site explained exactly where my money was at each step. Saved me from constantly checking my bank account. No surprises with the fees either.

I went through this exact situation last year! The temporary account thing was so confusing, and when my refund was delayed, I couldn't tell if it was stuck with the IRS or with TurboTax's bank partner. I tried calling TurboTax but waited on hold for over an hour. Finally used Claimyr (https://claimyr.com) to reach a real person at the IRS who confirmed my refund had already been sent to SBTPG three days earlier. Called SBTPG after that and they processed my payment that same day. Sometimes you just need to talk to a real person to get things moving!

I just went through this on March 15th. When you choose to pay TurboTax from your refund, they work with Santa Barbara Tax Products Group. Your refund goes there first, they take their cut, then send the rest to your bank. In my case, the IRS sent my refund on March 15th, SBTPG received it on March 16th, and I got the remainder in my bank on March 18th. You can actually track this by creating an account on the SBTPG website - just google "SBTPG refund status" and you'll find it. Much better than wondering where your money is!

I don't trust this system at all. They don't make it clear enough that you're paying an EXTRA fee just to have your fees taken out of your refund. It's like paying a fee to pay a fee! And then your refund sits in some random bank account you don't control for days. What if there's a problem? Who do you even contact? The whole thing seems designed to confuse people and make extra money off those who can't afford to pay upfront.

Guys, this isn't as shady as some ppl are making it sound. Yes, there's an extra fee (which they DO disclose btw), but it's a convenience service. Nobody's forcing anyone to use it. I've done it both ways and tbh the fee deduction is super convenient when you're tight on cash during tax season. Just plan for the extra days of processing. The SBTPG website lets you track everything. Just google "SBTPG refund status" and create an acct with your SSN and expected refund amount. Way better than wondering where ur $$ is.

I believe I can share a specific example that might help illustrate the process. When I filed through TurboTax in February, my total refund was approximately $3,200. I chose to have my TurboTax fees ($89 for Deluxe) deducted from my refund. The IRS approved my return on February 12th and issued the full $3,200 to the temporary account at Santa Barbara Tax Products Group. From there, SBTPG took the $89 TurboTax fee plus their own $39 processing fee, leaving $3,072 which was deposited to my bank account on February 15th. The deposit showed as "SBTPG LLC TAX REFUND" on my bank statement, not from the IRS directly. You can actually track this whole process on the SBTPG website if you create an account.