So both Turbo Tax and H&R Block offered a deal this year where if you requested your federal return in e-gift cards, they would give you a 5 to 10% bonus based on the service you requested. Let's assume for the sake of simplicity this was 10%, and let's also assume you would have consumed this amount and not reinvested it.

Wouldn't that yield a 15% APY on your money invested into this program (up to $9000 max). I consider that a very good return.

From this standpoint, does it make sense to try and maximize your expected return( up to $9000). The only problem I see is that this is the first year they have done this, and I'm not sure if you would be able to guarantee they would offer the same rates next year (which could lead to loss of potential on your investment dollars).

  • Where is 15% coming from? A 5% bonus on $9000 is $450. What are you dividing that by to get a return percent? Commented Jan 30, 2015 at 19:17
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    The bonus is 10%, but this is money that comes out of your paycheck, so in terms of annual return, you'll see 10% return on money you spent a year ago, but also 10% return on money you spent last paycheck. So your actual annual return is slightly higher, (50% higher) as the money is distributed over the entire year.
    – Triplell89
    Commented Jan 30, 2015 at 20:00

2 Answers 2


So, if I understand the investment program here:

  1. You have $100 of tax withheld from your salary at the end of Jan, Feb, Mar... until December. This withholding is in excess of the expected tax for the year.

  2. You use the appropriate H&R Block product to file your taxes, and H&R Block gets your refund of $1200 on March 1st.

  3. H&R Block adds 10& and give you e-cards for $1320

On the face of it, this represents a return of 15.19% per year, compounded monthly.

However, there are a few wrinkles that might make the scheme less inviting:

You'll get a receipt for miscellaneous income from H&R Block, and pay tax on the "earnings".

The quoted return is only realized if you can use the e-cards immediately. If they sit around for a while, then they aren't earning any interest. If you sell them for cash at a discount (if you even can!) then this reduces the return. If you don't cash them at all, they're a total loss.

This offer was announced on Jan 15, 2015. So you can't go back and put it in place for 2014. And if you set it up for withholding in 2015, is there any guarantee that it the same offer will be in place when filing in 2016?

  • 1
    Nice explanation. Is the ecard good as cash or limited to a few stores? Commented Jan 31, 2015 at 2:11
  • Apparently the ecards are for certain specific stores They do include IHOP mmmmmm. Details here hrblock.com/lp/refund-bonus.html
    – DJohnM
    Commented Jan 31, 2015 at 2:57
  • In the end, it seems to hinge on whether those stores are ones you frequent. None of them are ones I'd spend $1000 at. If you are a big Staples or HD customer, it makes sense. Easy to adjust W4. Underwithhold first 6 months, then catch up rest of year. Commented Jan 31, 2015 at 3:13
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    @Joe not at all. The main difference is that the credit card rewards are a rebate, while this promotion is a bonus. On bonus you pay taxes, rebates reduce the basis of your purchases and are not taxable.
    – littleadv
    Commented Jan 31, 2015 at 5:46
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    @Joe - I agree it 'feels' the same. But. The IRS has drawn a line in the sand, and has made a distinction for tax purposes. littleadv' comment is correct. We don't write the tax code, just help understand it (on a good day). Commented Jan 31, 2015 at 15:36

There is one way to make money quickly. If you are married and both are over 50 and you can put money into a deductible IRA for 2014. The $5,500 contribution and $1,000 catch-up per person would allow the family to make a contribution of $13,000. If they are in the 25% tax bracket the $3,250 drop in their taxes would allow them to get a $325 bonus from their tax software.

Of course they would have already had to be getting a refund before the IRA contribution, or the new refund and bonus would be smaller. They would have had to meet all the program rules. And they must have a combination of 401Ks and AGI to allow deductible contributions.

This would drastically shorten the initial loan period.

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