For many clients, getting their tax refunds as fast as possible is a top priority when filing. As a tax preparer, you can help prepare your clients for smooth, fast filing and offer solutions that put money in their pockets as quickly as possible.
The key is clear communication about what documents and information they should bring to their appointments. The more informed they are when they walk into your office, the faster you can navigate through the maze of tax forms and get their returns filed. In this article, we’ll outline tax document checklists that you can pass on to your clients and discuss solutions like refund advance loans that let clients access all or part of their refund immediately.
Tax document checklist: what your clients should bring to your office
When clients know what documents to bring to a tax preparer, the filing process is faster and easier for both of you, resulting in faster refunds. Here’s a checklist of documents you can provide for your clients:
- Social Security cards or Individual Taxpayer Identification Numbers (ITINs) for themselves, their spouse, and dependents
- Other basic identifying information like addresses and full names of spouse and all dependents
- A valid driver’s license or other government-issued photo ID for filers, spouse
- W-2 forms for all employers
- 1099 forms for additional income sources, such as freelance work, side hustles, and dividends
- Proof of any other income, including rental, business, unemployment income, or farm income
Proof of expenses
- If you plan to itemize deductions, bring receipts of deductible expenses, such as medical bills, education expenses, and charitable contributions.
- For small business owners, have documentation for business-related expenses, preferably organized electronically in your bookkeeping software
Bank account information
- Bring a voided check or have your bank routing number and account number information for direct deposit of the refund.
Previous tax returns
- While not necessary, bringing the previous year’s tax return can be valuable for identifying any changes in circumstances or overlooked deductions
Health insurance information
- If you received a Form 1095-A, 1095-B, or 1095-C, be sure to bring them
- If applicable, bring records of education expenses, including Form 1098-T for tuition payments.
Other things for your clients to consider
In addition to the basic checklist, there are several other considerations that clients sometimes forget to mention that can significantly impact their tax situation. Be sure to let your tax preparer know if any of the following apply to you, and of course, bring any related tax forms you received.
Marriage, divorce, or the birth or adoption of a child can all influence tax liability. Job changes are usually covered in your tax forms, but be sure to mention them or any major changes in income just in case.
While tax laws on cryptocurrency were somewhat murky for several years, the IRS does require all taxable cryptocurrency transactions to be reported. Be sure to bring records of all crypto activity to accurately fill out Form 1040 D.
Not all homeownership changes will impact your federal tax return. However, it’s still a good idea to inform your tax preparer about any changes in homeownership, including buying or selling property, refinancing a mortgage, or making home improvements as some can impact your tax return.
Information about contributions to retirement accounts, such as IRAs or 401(k)s, is essential for accurate tax preparation.
A word on refund advances
For clients who 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. Refund settlement banks can provide your client with all, or a portion of their refund far sooner than the IRS would, enabling your clients to leave your office with their refund.
Then, 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 any applicable fees and interest and distributes the remaining refund to your client. Be sure to inform your client that fees and sometimes interest are involved in refund advances, though there are several interest-free options.
Fast filing and accurate returns are the key to faster refunds. By providing clients with a tax document checklist, tax preparers can streamline the process and expedite the filing of tax returns. A well-prepared client not only ensures a faster refund, but also contributes to a smoother and more accurate tax preparation process overall. And for clients who want their money even faster, remember that refund advance loans can provide all or part of their refund almost instantly upon approval.