For many clients, getting their tax refunds as fast is a top priority when filing. As a tax preparer, you can help guide your clients through smooth, fast filing and offer solutions that put money in their pockets as quickly as possible.
Early filing and accurate returns are the key to fast tax refunds. A well-prepared client ensures a faster refund and contributes to a smoother tax preparation process. For clients who want their money even faster, remember that tax refund advance loans can provide all or part of their refund almost instantly upon approval.
Provide clients with a tax document checklist
Tax preparers can help expedite their clients’ refund process by providing a comprehensive checklist of necessary documents for accurate and efficient filing. You should advise clients to gather personal information, including Social Security cards or ITINs for themselves and their dependents, along with identification such as a valid driver’s license.
They’ll need income documents like W-2 and 1099 forms, as well as proof of expenses for itemized deductions, including receipts for medical and education expenses. Clients who are small business owners should organize documentation for business expenses, and all clients should also provide their bank account information for direct deposit, any previous tax returns for reference, and relevant health insurance information like Forms 1095-A, 1095-B, or 1095-C.
Advise clients to file early
Encouraging clients to file their taxes early can significantly expedite the refund process. Early filing not only allows clients to receive their refunds sooner but also reduces the likelihood of delays associated with last-minute submissions.
When clients file early, they avoid the high volumes of returns during the peak season. Additionally, early filers have more time to identify and address potential issues, such as missing information or discrepancies, which could lead to further delays.
Identify and avoid common refund delays
As a tax preparer, you should proactively avoid common IRS errors that can cause
refund delays. Common mistakes include incorrect Social Security numbers, missing signatures, and unreported income. To minimize delays, ensure all information is accurate and complete before submitting a client’s tax return.
Communicating potential IRS delays, such as identity verification or returns claiming certain credits, can also help manage client expectations. Inform them that refunds can also take longer to receive during peak season. This proactive approach keeps clients informed and satisfied throughout the process.
Factors that can affect client refunds
There are several considerations that clients may not think to mention but that can significantly impact their tax situation. Discuss these potential impacts to determine if any of the following apply to your client.
Life events
Marriage, divorce, or the birth or adoption of a child can all influence tax liability. Job changes are usually covered in your clients’ tax forms but be sure to discuss any major changes in income, just in case.
Crypto investments
While tax laws on cryptocurrency were somewhat unclear for several years, the IRS does require all taxable cryptocurrency transactions to be reported. Be sure to ask your clients to bring records of all crypto activity to accurately fill out Form 1040 D.
Homeownership changes
Not all homeownership changes will impact your federal tax return. However, it’s still a good idea to ask your client about any changes in homeownership, including buying or selling property, refinancing a mortgage, or making home improvements as some can impact their tax return.
Retirement contributions
Information about contributions to retirement accounts, such as IRAs or 401(k)s, is essential for accurate tax preparation.
Offer refund options for clients
Offering a variety of fast refund solutions is a great way to accommodate your clients’ different needs. You can help clients choose the most suitable option depending on their situation. Start by discussing refund advances, which provide immediate cash ahead of their tax refund.
Encourage clients to consider big purchases or financial obligations they may have. Discussing these elements allows clients to evaluate how a tax refund could best be allocated, potentially purchasing necessary items or paying off debts.
If clients do not qualify for a refund advance, personal loan options can be a valuable alternative. With an anticipated tax refund, your client may qualify for a personal loan through a bank or credit union. However, personal loans may come with higher interest rates. By providing clear explanations and personalized guidance, you can help clients make informed decisions about how to get their tax refund fast.
Tips for suggesting refund advances
Offering bank products can boost your revenue, and providing a refund advantage makes your business more attractive to potential customers while better fulfilling the needs of your current customers. Here are some tips for recommending tax refund advances to your clients:
- Listen to their needs — Before suggesting a refund advance, listen to your client’s financial situation and goals. Tailor your advice accordingly to ensure they choose an option that aligns with their needs.
- Highlight the benefits — Refund settlement banks can provide your clients with all, or a portion of their refund far sooner than the IRS would, enabling them to leave your office with their refund.
- Educate on their options — Make sure to inform your clients about their choices when it comes to receiving their tax refund. If they want their refund as fast as possible, consider offering them refund advances through bank products. When you file your client’s return, they can choose to receive their refund as a refund advance loan.
- Explain the process — Walk your clients through how refund advances work. Explain that when the IRS distributes the refund, it will be sent to the refund settlement bank to pay back the advance loan. The refund settlement bank deducts applicable fees and interest and distributes the remaining refund. Let them know that fees and sometimes interest are involved in refund advances, though there are several interest-free options.
- Discuss fees and interest — Be sure your clients understand that the refund settlement bank deducts applicable fees and interest and distributes the remaining refund. Let them know that fees and sometimes interest are involved in refund advances, though there are several interest-free options.
