Are you expecting a tax refund because you overpaid your 2004 taxes? Do you typically get a refund check? If so, you're not alone. The IRS says that 77 percent of all taxpayers received a refund on their 2003 federal income tax returns. Those refunds averaged more than $2,100. And while a big tax refund may seem like a windfall, there are some potential pitfalls, too. FDIC Consumer News doesn't give tax advice, but we can suggest money-saving options to consider or discuss with your tax advisor:

If you need cash and you can't wait for your tax refund, carefully consider your options and costs: Perhaps you've heard or read about "refund anticipation loans" (RALs) arranged by tax preparers for people who file their returns electronically. These loans enable you to get cash in just a day or two and pay the money back with your tax refund. RALs may offer quick and convenient access to cash and the fees may seem small, but be careful. The costs translate to very high interest rates compared with other loans.

For the typical RAL, you can expect to pay lender fees of about $35 to $100 (depending on the size of the loan). These fees can translate to Annual Percentage Rates (APRs) of about 60 to 650 percent or more, far above what you'd probably be willing to pay for other loans. (Note: The federal Truth in Lending Act and the Federal Reserve Board's Regulation Z require lenders to disclose information about loan costs if certain criteria are met. Some states and cities also have adopted regulations requiring loan cost disclosures.)

"A refund anticipation loan is a high-cost loan that people can avoid if they're willing to wait a few weeks for their refund," said Vanessa Hester, the FDIC's Chief of Accounting and Tax Policy. She noted that the IRS says taxpayers will receive their refunds within three weeks if the return is filed electronically (two weeks if directly deposited into a bank account) and is complete and accurate. "Unless you need the funds for an emergency or another compelling reason, it almost never makes sense to take one of these loans."

Steve Johnston, an FDIC Senior Accountant, added, "You've already lent Uncle Sam your money interest-free, so why also pay a big fee to get your own money back a little sooner?"

If you really need to borrow money before your refund arrives, consider lower-cost options, such as tapping a home equity line of credit or using your credit card for necessary purchases. "A good principle to follow, in all situations, is to borrow money only when necessary and to shop carefully so that you can borrow in the most economical way," said Donna Gambrell, Deputy Director of the FDIC's Division of Supervision and Consumer Protection.

Some experts also suggest freeing up additional cash by paying less (or nothing) for your tax preparation. One IRS program that the FDIC is helping to promote is the Volunteer Income Tax Assistance (VITA) service, which provides free help to low- and moderate-income citizens in preparing their income tax returns and obtaining the tax deductions and credits to which they are entitled. Some VITA locations also offer free electronic filing, which can mean faster access to refunds, too. Another IRS program is Free File, which enables anyone to prepare and file their federal taxes for free through the IRS Web site. "Free tax preparation enables more consumers to save money and avoid a high-cost loan," said Cathy Davis, an FDIC Community Affairs Specialist and a VITA tax-preparation volunteer. For more information about these and other services, go to www.irs.gov.

Have your tax refund deposited electronically into your bank account: Direct deposit is the fastest way to get your tax refund, especially if you file your return electronically. Direct deposit also is the safest way to obtain a refund because paper checks can be lost, misplaced or stolen.

Make the best use of your refund: Sure, you can treat yourself to a new car or spend the money on that wide-screen plasma TV. But consider some more "sensible" alternatives: Pay down or pay off your loans and other bills, starting with the ones that charge the highest interest rates on unpaid balances. Start or add to an existing savings account. Fund a retirement account or college savings plan. Or, use the money to protect the value of your home by making repairs or improvements.

Consider ways to reduce or eliminate a tax refund in the future: You wouldn't intentionally overpay your electric bill each month just because you knew you'd eventually get the extra payments back at the end of the year. So why pay your taxes that way? A tax refund of $2,000 breaks down to about $167 per month that you lent the U.S. government interest-free each month.

Review your current year's tax situation to be fairly sure you won't have a significantly higher tax bill than in the past. If a change is appropriate, fill out a new W-4 form from your employer increasing the number of your "personal allowances." This adjustment will reduce the tax money withheld each pay period and increase your take-home pay. On the other hand, if you owed a lot of money on last year's taxes, consider decreasing your take-home pay.