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How to Transform Your Business Using Tax Bank Products

Bank products allow your customers to pay your for service fees and obtain a refund with no out-of-pocket costs. If you're on the fence about using bank products, here's what you need to know about how they can help you and your clients.

What are tax bank products?

Bank products are “ a means of disbursing your clients' tax refunds. They also allow your clients to pay for your tax services by instructing the tax bank to deduct the amount from their tax refund. Additionally, bank products give your clients the option of receiving a portion of their expected tax refund in advance. Bank products are also known as "settlement solutions" and "refund transfers."

How Bank Products Work

After you've confirmed that your client is eligible to receive a tax refund, you can offer them the alternative of collecting their refund and paying your fees using a bank product. The funds are transmitted instantly from the IRS to the refund settlement bank, who then administers your fees to you and the remainder of the funds to your client.

Bank products also provide your customers the option of receiving their tax refund via direct deposit, a printed check from your office, or prepaid debit card. USTPA TaxCloud displays the client's refund transfer and refund advance options once the tax return has been completed, in the e-File section of the software.

If your client chooses to use a bank product, they will incur a small bank processing and software technology fee. These small fees will be deducted from the tax refund per the terms of service agreement, and your earnings are never reduced.

What Else Can Bank Products Do?

Contingent on the refund amount, your client may be able to receive a portion of the refund as an advance and choose the amount of the advance. A non-recourse loan secured by the taxpayer's refund is known as a refund advance. The bank receives the refund and uses it to repay the loan, deducting both its and your expenses before distributing the remaining funds to the taxpayer. This ensures that you get paid for your services if the client elects not to pay out-of-pocket.

You will be able to give refund advances irrespective of which bank you use. Each bank provides a small interest-free advance loan as well as multiple interest-bearing loan tiers.

How to Get Started Using Bank Products

USTPA's Customer Growth Team can assist you with selecting which of our tax bank partners is the right fit for your firm and facilitate the process of your enrollment. If your firm is  approved, you can start offering refund transfer and advance loan options instantly! The typical time from application submission to approval is 72-hours.

What is Needed to Get Approved?

For the purpose of fraud prevention, our tax bank partners do not publicly disclose their underwriting criteria for approval. However, here are a few tips that will greatly increase your firm's chances:

  1. Be a registered business entity with the Secretary of State where your business is located e.g., Limited Liability Company (with or without an S-Corp election), Limited Liability Partnership, C-Corporation

  2. Have a commercial business address. Note: This does not require you to have a physical location where you perform services. Leasing a corporate mailbox (not a PO Box) that provides a physical business address will suffice. We recommend using ALIANCE VIRTUAL OFFICES. Click HERE to find your nearest location to register.

  3. Your firm must have its own Electronic Filing Identification Number (EFIN). This is not to be confused with the Employer Identification Number (EIN) Click HERE for instructions on how to get your EFIN

  4. An officer of your firm should not have defaulted on a refund advance loan in the past

  5. The primary applicant should not be listed in ChexSystems

The above information is not an official list of requirements, and having all of the above does not guarantee your approval. However, the above information can increase your chances of approval.

Improve cash flow & grow your business

High net worth taxpayers typically will not use bank products and will gladly pay out-of-pocket. However, the use of bank products gives your firm access to millions in revenue by providing services to across multiple demographics. The use of bank products helps to remove concerns about payment and allows you to focus on your expertise. Our bank partners will take on the task of receiving the payment and depositing your fees directly to your business account.

Offering bank products also gives you an edge over tax firms who don’t. You can offer your services at no out-of-pocket costs to your clients, and help them access their money faster. To take full advantage of bank products, differentiate yourself from your competitors. Advertise how you can help your potential clients get their refunds more quickly with no upfront costs. You'll thank us later.


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