Get Early Tax Refunds for Your Clients with Bank Products

Oct 18, 2021

Get Early Tax Refunds for Your Clients with Bank Products


With the arrival of October, a tax preparer has to begin preparing for the upcoming tax season’s demands. Including the possibility of offering bank products to clients. Enrollment in bank product programs for the next tax year usually begins in October.

Have you offered bank product solutions to any of your clients? If not, then consider doing so. Offering bank products can lead to higher customer satisfaction. They allow your clients to receive an advance on their IRS refund—so they’ll get their tax return faster than they would without bank products.


What Is a Bank Product?

A bank product is a vehicle for a set of transactions that can benefit you and your client. The client can receive their tax refund more quickly. (Technically, they can get an advance on the refund before it has been remitted by the IRS.)

Though the client does not receive the full amount of their refund. You will withhold part of your client’s refund to use in paying associated service fees. (This action would be illegal if performed without using an accredited bank product provider.)

You can also choose to withhold your tax preparation fee so that the client is not charged upfront. Instead of receiving payment directly from your client, you can take your fee out of the client’s tax refund. Through the use of a bank product, the amount of your fee can be automatically deposited into your account.

A specialized bank manages the bank product program in partnership with a tax software company such as UltimateTax. Contact the support team of your tax software subscription. Ask them if they offer bank products. If they do, ask for details about the programs.


Should You Use Bank Products?

Bank products offer some great advantages. There is hardly any downside to using them. Perhaps the only issue would be explaining the advantages to your client. That should not be too difficult, right? You’re telling the client that you’ve found a way to get them their tax refund faster.

But it’s also important that you be transparent and let your client know that bank products come with some fees. Explain what those fees are and tell them that they won’t have to pay you anything. Instead, the fees will be paid by deducting the amount from the client’s IRS refund.

Most clients will find the convenience of an early refund outweighs the cost of incurring a slight extra fee. You can also tell the client that they won’t have to pay your tax preparer’s fee upfront. They should be pleased to hear that.

You certainly will benefit from using bank products. You won’t have to trouble yourself chasing down payments for your tax preparation services. Simply take your fee out of the client’s refund (again, this action is only legal if it is done through a service provider).


Benefits of Using Bank Products

Let’s run down the list of benefits of using bank products. When pitching the idea to a customer, you can consult the following list of client benefits:

  • Immediate tax refund. Your client won’t have to wait for the IRS to process and remit their tax refund. They can promptly receive it in advance (minus a few deductions for fees). On-the-day, in fact!
  • No further upfront payments to the tax preparer. The client doesn’t have to dig into their pockets to hand out a payment for your fees. You can offer to withhold a portion of their refund in lieu of taking a direct payment from them.
  • Flexible refund options. Depending on the tax software company, multiple options may be available for customers to receive their advance. UltimateTax lets clients receive it via check, debit card or direct deposit.
  • Access to loan options. Again, this depends on the tax software company’s policies. UltimateTax helps you offer loans to your clients. Their available loan options depend on the amount of their estimated tax refund.

Now here are the benefits to tax preparers:

  • Immediate fee fulfillment. You won’t need to badger a customer about payment, or run after anyone. With bank products, you can deduct your fee from the client’s tax refund. That will expedite the turnover of payment!
  • Higher customer satisfaction. You’re helping clients get their tax refunds right away! That’s bound to increase their level of satisfaction with your tax office. Who doesn’t like receiving money?
  • Earn special bonuses. With UltimateTax, you can earn rewards and benefits after selling a certain number of bank products to your clients. Including a FREE tax software license for one year. Sell more than 50 and UltimateTax will start paying you for every succeeding refund you process.


How Bank Products Work

Still undecided? Then let’s take a look at how to process a bank product for your client. You’ll find that it’s a fairly simple set of procedures. Here are the steps to follow:

Step One: Prepare the client’s return. You can only offer a bank product if the customer is eligible for a tax refund. You will know if they qualify after you have prepared their taxes.

Step Two: Have Due Diligence forms signed. If the client purchases a bank product, get them to sign Due Diligence forms as required by the IRS.

Step Three: Select the form of disbursement. Some tax software companies provide multiple options for the client to receive their refund. UltimateTax lets you give them three options: debit card, check or direct deposit. Debit card is the fastest. If the customer opts for debit card, they can get their refund on the day of their bank product application.

Step Four: Complete the application form. Use your professional tax software to fill out the bank product application form. Print it out and ask the client to sign the application documents.

Step Five: File the client’s return. Check that the client has signed all of the necessary documents. If you are satisfied, then proceed with filing the client’s tax return. With that, your part is done.


How to Apply for Bank Products

So have you decided to offer bank products to your customers? That’s an excellent idea. The only question is, how do you go about doing that? Actually, all you need to do is follow five simple steps.

Step One: Select a tax software provider that supports bank products. If you already have a tax software subscription, contact the software company’s support team. Find out if they offer any bank products. If they do not, you may have to wait until next year to get professional tax software that supports bank products.

Step Two: Select a bank product provider. This is generally a type of specialized bank that partners with tax software makers to offer bank products. UltimateTax offers a choice of two partners: Santa Barbara Tax Group (TPG) or EPS Financial. Both of them are reputable organizations with an excellent track record of service and compliance.

Step Three: Complete the enrollment process. After you’ve chosen your bank product provider, you will need to go through an application process. Fill out the required forms and submit your application. After a short time, the bank will notify you through email that you can go to the next step in the process. And that would be….

Step Four: Pass the bank’s compliance test. The bank needs to check the legitimacy of all tax professionals who apply for the bank product program. You will need to provide the bank with information they can use to determine the legitimacy of your practice. If you pass, the bank will approve your enrollment in the bank product program.

Step Five: Sign a contract. Simply sign a contract with the bank and software provider, and you’re good to go! If your enrollment was facilitated by UltimateTax, you will also receive compliance training to get you updated on regulations. The training is quick, and you’ll soon be ready to offer the bank products to your customers!

Get UltimateTax today and start offering bank products in no time! To try a free demo of UltimateTax professional tax software, click here.

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