Refund Anticipation Checks (RAC). The taxpayer’s refund is deposited into a temporary bank account, which the tax preparer uses to write a check (or give a prepaid card) to the taxpayer. Effectively, this option is a preparation fee loan as tax preparer costs are deducted before payment is made to the taxpayer.

There are three status updates which the taxpayer might see: “received return,” “refund approved,” or “refund sent.” If the refund has been sent, it could be up to 5 days before the money shows up in your bank account or a few weeks before your check has been received.

Discover the basics of how the IRS tax refund works. Learn strategies for maximizing them and tips on how to use them wisely.