Bank Products

[Earl]

I am thinking this year about using a bank product for the first time. I do not want to do
rapid refunds, debit cards or print checks. I just want the product to take my fees from
the clients refund.

Does anyone know of a bank product that just does fee collection and what costs are
involved.

My current clients would probably not use this feature, however, would like to try to
increase client base by getting clients that now go to big box companies simply because
they do not have to come up with money to pay preparation fee out of their pocket.

[Jiggers]

What tax software do you use?

[KBTS]

I am thinking this year about using a bank product for the first time. I do not want to do
rapid refunds, debit cards or print checks. I just want the product to take my fees from
the clients refund.

Does anyone know of a bank product that just does fee collection and what costs are
involved.

My current clients would probably not use this feature, however, would like to try to
increase client base by getting clients that now go to big box companies simply because
they do not have to come up with money to pay preparation fee out of their pocket.

Just asking - if they cannot pay your fee out of pocket, are these really the type of clients you want to attract? Seems that these type of clients are also the ones who price shop every year.

[Jiggers]

Just asking - if they cannot pay your fee out of pocket, are these really the type of clients you want to attract? Seems that these type of clients are also the ones who price shop every year.

Here in a small South Texas town, I have MFJ clients with a kid or two, W-2's totalling $80,000, which is a lot for this small town, and live paycheck-to-paycheck.

I have another MFJ client, W-2's, 1099R, totalling $200,000, and $10 interest income. Spend everything they get.

My software uses EPS Financial, very cheap, and I get my fee deducted from their refund, and the client pays the small fee. Not an RAL.

But I only had 3 that used that this past year.

[erchess]

Jiggers do you have to print checks?

I was not aware that there were RAC options that print the check for you? I am aware of spending cards and the possibility of direct deposit of course.

In case there is anyone here who doesn't know it, RAC is industry shorthand for a tax refund related bank product that is not a loan. From the IRS's point of view what is happening is a direct deposit into the client's bank account but this account is set up especially for receipt of the tax refund and once the money is there the account closes with fees going to the bank and the preparer and the balance to the taxpayer. The fee is much lower than for a loan product because there is no loan and the taxpayer gets no money until the IRS deposit if any. A typical RAC fee as far as I know is around $20. I've always felt that it isn't bad for someone who either has no bank account of their own to receive a DD into or lacks the funds to pay up front.

[ChEAr$]

Unless I'm dreaming (or smoking some of Ed's mountain weeds!) I've heard that the old RAL is dead.

So it's back to the way it used to be before 1989, small loan companies and even individuals putting up the dough based on a presumed refund. And if it's not paid back, well, the term "kneecapping" comes to mind.

[erchess]

Interesting

I did not know that the old RAL was completely dead although I did know that they were becoming harder to obtain.

[okie1tax]

Bank products

Jackson Hewitt and Liberty both still offer RALs this year.

[Bonnie]

Refund Advantage is a great company out of Louisville Ky. I've used them a few years for the 2 or 3 I do each year and love the company. Love the area marketing report at the end of each filing year that is available thru their website that is available to me free of charge. I'm thinking too that there are no more Rapid Refunds, they didn't even offer them last year. . Big companies are doing the Bank Products where they take the fee and either give check, Debit Card or Direct Deposit to customers Bank Account.

[Jiggers]

I was not aware that there were RAC options that print the check for you? I am aware of spending cards and the possibility of direct deposit of course.

In case there is anyone here who doesn't know it, RAC is industry shorthand for a tax refund related bank product that is not a loan. From the IRS's point of view what is happening is a direct deposit into the client's bank account but this account is set up especially for receipt of the tax refund and once the money is there the account closes with fees going to the bank and the preparer and the balance to the taxpayer. The fee is much lower than for a loan product because there is no loan and the taxpayer gets no money until the IRS deposit if any. A typical RAC fee as far as I know is around $20. I've always felt that it isn't bad for someone who either has no bank account of their own to receive a DD into or lacks the funds to pay up front.

I do not print checks.

E-file the return. Once approved by the IRS, and the refund is released, it goes to EPS Financial who direct deposits my fee and send the balance, less EPS/Drake fee, to my client by way of direct deposit.

[Earl]

Current tax software is Taxslayer Pro.

[oceanlovin'ea]

TaxslayerPro offers bank products and I am pretty sure they offer the option to just have your fees withheld and sent to you.
I use TaxslayerPro too. I have thought about doing this but haven't so far. I need to call my rep and ask him the procedure.
That is what I would suggest you do.

Linda, EA

[taxmandan]

Republic Bank still offers RALs, they have a cease & desist order effective April 19th, 2012 from the gov't. so this is the last year for RALs.

I use EPS to have my fee taken out of the refund, works great and I only DD or print a check, no debit card option. Printing the checks is easy, been doing it since the beginning of time.
It's another client service option and they are the type of client I want, only a handful are EITC, many middle income like the convenience and can get in earlier in the year to file. Most are now using DD, only printed a dozen checks last year out of ~75 RACs.

[oceanlovin'ea]

Refund Advantage

Bonnie, I just talked to Refund Advantage. I guess their fee is reasonable. I probably would only offer it to a few of my clients. Most of them can pay me when I do the return. I will think about it overnight and decide tomorrow.

Earl, you might give them a call.

Linda, EA

[MAJ]

Ral - Smal !!

Many of my clients are long term clients - There are the times when $$ is tight. I have 4 kids and totally get that... My oldest just got his license in October and crashed MY CAR twice!
Those I tell them to pay me when they get their refund. If they beat me I beat them - Simple - Good to have a wife with a 'large' Italian Family -- Loved the Knee Capping comment!!

No seriously - If you need to beat me that bad - Karma is a killer....
Many software companies are offering a $15 fee based collection offer. Not bad...

RAL is dead because the IRS no longer releases the client scores to the banks. Basically from what I understand it was kind of like a credit score on the taxpayer. The score was based on things like - if you normally get a refund - Do you normally owe? - Do you owe any portion of the government back debt - school loans - etc.

So let's assume all of that is NOPE - You always get a refund & owe nothing. You are a zero liability to people like H&R Block. But then they factor in your credit score and find a reason to know you down but still charge you 85% of the costs.. Nice!!

MeF is helping to end it as well.. If you can't wait 6 days something is seriously wrong. Or - file it 6 days earlier!! 8-)