With a large amount of returns containing EITC and ACTC expected to fund shortly, it is important to be prepared
Feb 16, 2018, 8:01am EST
DELRAY BEACH, Fla., Feb. 16, 2018 /PRNewswire-iReach/ — After being introduced last tax season, the PATH Act ensures all taxpayer returns containing Earned Income Tax Credit or Additional Child Tax Credit will not be reviewed until February 15th, and funding for these returns is expected to begin around February 27th. The goal is to allow the IRS more time to review the returns and prevent fraud that is sometimes associated with these types of files. That date may still feel far off, but it will be here soon. Every year, tax preparers face the same issues around expected large funding dates, so it is best to expect and prevent those issues.
The largest issue affecting tax preparers using bank products is accounting for the repayment of any pre-season or taxpayer loan programs. Many tax pros forget that all the banks take payment for taxpayer advances from the first available funds, and do not wait for each taxpayer to fund before charging the tax pro for that client. This means EROs can expect to see significantly lower deposit amounts than expected, if not entirely wiped out deposits. Each bank has reporting available on their website to track the total debt, and how much remains after each funding cycle.
Another major that affects clients every year is offset refunds. This occurs when the taxpayer has a past due debt obligation on their account, and either a portion or their whole refund is garnished to pay that debt. This surprise can be mitigated by having the client contact the Treasury Offset Hotline at 800-314-3107. Ian Gardner, of Sigma Tax Pro, reminds tax pros that, “Even if a client’s whole refund is offset, the taxpayer still owes the tax pro their preparation fees for their services. You did the work, make sure you’re paid for it.” Many tax professionals automatically count these funds as lost and end up missing out on available profits.
For additional details about the Upcoming IRS Funding or to learn more about the Sigma Tax Pro software, visit https://sigmataxpro.com.
About Sigma Tax Pro
Sigma Tax Pro provides a full range of essential tax software services for tax professionals. This includes industry leading professional tax software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.
Media Contact: Ian Gardner, Sigma Tax Pro, 561-450-6422, [email protected]
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For the original version on PRWeb visit: https://www.bizjournals.com/southflorida/prnewswire/press_releases/Florida/2018/02/16/MN16522