two bank accounts

[jainen]

IRS says you can't charge clients anything at all for splitting their refund into two bank accounts.

[RLymanC]

Bank accoubts

Does your software allow that? Mine only has room for one.

[Unregistered]

This is new for 2006.

[Black Bart]

No need

IRS says you can't charge clients anything at all for splitting their refund into two bank accounts.

to charge them for it. I have a client who's got this all worked out.

Since he and spouse can't have a bank account (the other would clean it out), they simply agree that the check belongs to whoever watches the mailbox closely enough to snatch the check first, forge the other's name, and cash it. No software necessary either. Neat, eh?

[Bees Knees]

I got one now, and have had several in the past, where spouses want to know who owed what, and how much of the withholding from one paid the tax of the other.

This on a joint return.

This split refund thing is IRS thinking they are helping us provide a service to our clients. It will only make matters worse, as more will want us to figure everyone’s tax bill and split their refund.

I don’t think I will even tell any of my clients about this option.

[Snaggletooth]

Charge 'em out the gazoo...

Bees, I will simply ask them to agree on what amount of money goes into which account.

Of course, over half of them will want ME to figure out what is "right" and thus referee the refund. No fun, and a no win situation.

There is an IRS-prescribed method of allocating tax liability and payments, thus a solution to the refund allocation problem. The method assumes MFS rates, and allocations all the way down to the tax liability. If asked, I will go through this rather laborious process and charge my normal hourly rate.

Of course, after having done this, each spouse is going to agree that your results are fair, right?

[Bees Knees]

A simple solution to this would be to make MFS rules no different than MFJ. Many states do it this way. Why does the government penalizes people who want to keep their finances separate?

[Gene V]

IRS says you can't charge clients anything at all for splitting their refund into two bank accounts.

Jainen, I usually charge by forms, if I have to print form 8888, I’ll probably charge for it, where can I find the information about IRS saying we can’t charge for this?

Thanks

Gene

[jainen]

Pub 1345

>>where can I find the information<<

It's interesting that this has ALWAYS been the rule. Pub 1345, the Handbook for Authorized e-file Providers, specifically says that we “must never charge a separate fee for direct deposit and must accept any direct deposit election by a taxpayer to any eligible financial institution.” What's new is that now there is a different direct deposit election, but you still can't charge for it. (Note that this applies only if you are an authorized electronic return originator subject to Pub 1345.)

[taxmandan]

Jainen, I usually charge by forms, if I have to print form 8888, I’ll probably charge for it, where can I find the information about IRS saying we can’t charge for this?

Thanks

Gene

Pub 1345 says you can't as an ERO charge for the form to make a direct deposit. Now the time it takes to explain this to the client and determine the allocation of funds as some preparers may do for their clients, that's billable time to me.

I also will not tell my clients about this option, looks to be a real pia, like asking them for a PIN for the 8879.

[Gene V]

like asking them for a PIN for the 8879.

I agree, tried that once, taxpayer changed his mind three times, so now I let the computer select the pin.

[Jiggers]

pin

I agree, tried that once, taxpayer changed his mind three times, so now I let the computer select the pin.

I just use the taxpayer's zip code! Simple. Clients have never questioned it!

[jainen]

in this business

>>the time it takes to explain this to the client and determine the allocation of funds<<

I appreciate that it is frustrating, but you are not on solid ground here, taxmandan. When it says you can't charge for the option, it doesn't mean just printing the form. It means developing the information that is used for the form. You will have to consider the matter in your overall pricing structure, because you aren't allowed to charge a separate fee for this.

As for not explaining to your clients all their filing options, you aren't on very solid ground there either. Why exactly are you in this business?

[rjholmes]

One advantage of split deposits

would be directing part of the refund to an IRA account. Some people do not contribute until they have their refund, and this will give them a chance to make the deposit and not forget to do it before April 15.

[Bees Knees]

You will have to consider the matter in your overall pricing structure, because you aren't allowed to charge a separate fee for this.

As for not explaining to your clients all their filing options, you aren't on very solid ground there either. Why exactly are you in this business?

Most of us are in this business to make money. That generally means you have to charge people for stuff.

Why are you in this business?