THE INTERVIEW PROCESS “Going The Extra Mile for Your Client”
THE   INTERVIEW  PROCESS    Going The Extra Mile for Your Client
What Have We Learned So Far?
What Have We  Learned So Far
Timeline DECEMBER As December approaches you will begin the process of marketing and planting seeds for clients for tax preparation. In our “Marketing 101” video’s we spoke about: • How to approach clients about tax preparation. • Understanding the Market Segmentation, who will you file first. • How to utilize Marketers and Referral agents. • Utilizing Incentives to generate referrals. As the annual filing season approaches. You will start to find clients that are interested in an “Estimate”. Remember estimates turn into returns.
Timeline DECEMBER As December approaches you will begin the process of marketing and planting seeds for clients for tax pr...
Utilizing Tax Payer Advance Tax Payer Advance will assist you with helping ensure your estimates turn into returns! Clients that are interested in getting the advance have to file their taxes with you. Upon acceptance from the IRS, your client can be eligible for up to $500 in advance cash on their tax return.
Utilizing Tax  Payer Advance Tax Payer Advance will assist  you with helping  ensure your  estimates turn into returns  Cl...
Let’s Recap
Let   s Recap
MARKETING Step1 We learned: “How To Market” and the importance of Marketing. Owners: Market for Managers, Preparers, Marketers and Client’s Managers: Market for Preparers, Marketers and Client’s Preparers: Market for Marketers and Clients Clients: Because of the quality of Service, your Clients will do the marketing for you and your office!
MARKETING Step1 We learned     How To Market    and the importance of Marketing. Owners  Market for Managers, Preparers, M...
Step 2 SOFTWARE We learned: UFS 1040 Pro Software Most Commonly Used Forms: Questionnaire, Income Statements, Credit forms. Software Navigation: • • • • • • Overview of UFS 1040 Pro Dashboard and Web Software. Basic navigation of the software. The “Power of an Estimate” Real life Software Scenarios Understanding how the software calculates Utilizing the Bank Products • Imputing fee’s • Transmitting the return
Step  2 SOFTWARE  We learned  UFS 1040 Pro Software Most Commonly Used Forms  Questionnaire, Income Statements, Credit for...
Discovery Step 3 Now that you have done a fantastic job at marketing and you have clients wanting estimates. Estimates help you WIN the clients business. Your competition will be STATUS QUE. Most every taxpayer already has a tax preparer. Have a Understanding of: -What is your potential clients reason for considering switching tax preparers? -What are your clients needs? More money, better experience? More accurate return? More knowledgeable tax professional? Just shopping around? What if any is there pain?
Discovery Step 3 Now that you have done a fantastic job at marketing and you have clients wanting estimates. Estimates hel...
Bringing it All Together Now That You Understand: ü How to Market to find Clients and you will have those clients in front of you looking for estimates and to get their taxes filed. ü You have a clear understanding of what your client needs are, when they come to you for an estimate. ü You Understand and know how to recognize the type of documents/forms that your clients will be bringing you. ü You also now understand how to operate the software and how to take your clients information and put it in the software. Congratulations! The tax return is initially complete. The software has calculated your clients tax return or refund due. What’s next is to determine if your client “Qualifies” for any more money. We do this by asking “Discovery Questions” during our interview process.
Bringing it All Together Now That You Understand      How to Market to find Clients and you will have those clients in fro...
3 Important Questions You MUST Ask EVERY Client Our Interview Process starts with 3 Simple Questions: We Ask the Client: 1. How much did you get back on your tax return last year? (This question allows us to ascertain the clients knowledge of their own tax return.) 2. Are you filing the same way? Did Anything change in your filing status or income from last season? (Here I am getting the client to articulate to me what exactly has changed that may impact what they received back last season. Also it set’s up my next question) 3. What are you hoping to get back this year? (Tax Preparation is a Service oriented business. We work for our client, not for the IRS. Your job is to try and meet my clients expectations) (With this question we get an idea of what our client expects from their return after any fee’s that my be charged. This answer let’s me know what amount my client will be satisfied with based on their expectations.)
3 Important Questions You MUST Ask EVERY Client Our Interview Process starts with 3 Simple Questions  We Ask the Client  1...
Example Conversation Question 1: (Tax professional) “Terry how much did you get back on your tax return last year?” Answer: (Client Terry)“I believe I got back $6,500” Question 2: (Tax professional) “Are you filing the same way? Has anything changed with your filing status or income?” Answer: (Client Terry) No, I made a little more money this year. Question 3: (Tax professional) “Ok, based on that how much where you hoping to get back this year?” Answer: (Client Terry)“I was hoping to get back the same, maybe a little more if possible.” Tax Professional Response: “Ok Terry I will definitely take a look for you. I know you work hard for your money. That’s why I’m going to help you get back every dollar you deserve. As mentioned its just an estimate, it’s absolutely free. I can tell you that each year the IRS has new tax incentives that many people don’t realize they qualify for as well as one’s that expire that maybe you once qualified for. However; because I am aware of the recent tax law updates, I will review your information and I may have a few questions for you to see if you qualify for a few. How does that sound?”
Example Conversation Question 1   Tax professional     Terry how much did you get back on your tax return last year     An...
4th Do The Math: Understanding How a Tax Refund is Calculated Before you begin asking any further questions, we need to first understand how the federal income tax is calculated. For most people, tax is collected by an employer at a rate that estimates your tax for the year. Your actual earnings and the deductions that you’re allowed to claim might cause you to pay too much tax, which leads the Internal Revenue Service to issue you a refund. "The idea behind a tax refund is quite simple,” When you pay more tax than you owe, the Internal Revenue Service returns the overpayment as your refund. So, What factors impact an Income Tax return? 1. Federal Withholdings 2. Deductions 3. Credits
4th  Do The Math  Understanding How  a Tax Refund is Calculated  Before you begin asking any further questions, we need to...
Federal Income Tax Withholding When you start a new job, you’ll complete Form W-4. This is the Employee's Withholding Allowance Certificate, from which your employer determines your rate of tax withholding. It’s based on the personal allowances you declare or calculate, your income and any additional tax you wish to withhold. The amount your employer takes out of your paychecks to pay the federal income taxes. The amount your employer withholds is based on the information you provide on the W-4. The more allowances you claim on Form W-4, the less income tax withheld. This will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund or a tax bill at the end of the year). The amount of federal tax withheld is reported on your W-2, Box 2.
Federal Income Tax Withholding When you start a new job, you   ll complete Form W-4. This is the Employee s Withholding Al...
UNDERSTANDING DEDUCTIONS AND CREDITS “Making sure your client is getting the biggest refund allowed”
UNDERSTANDING  DEDUCTIONS AND CREDITS    Making sure your client is getting the biggest refund allowed
What's the DIFFERENCE between a Deduction and a Credit? A Credit directly decreases your taxable liability. A Deduction lowers your taxable income. This lowers the amount of tax you owe, but by decreasing your tax bracket -- not by directly lowering your tax. Ex: If you're in the 25% bracket, a $1,000 deduction lowers your taxes by $250. A $1,000 credit lowers the bill by the full $1,000. A Credit can be nonrefundable or refundable. A nonrefundable credit lets you reduce your tax liability to 0. A refundable credit can also reduce your liability to 0. If there's any amount left over from your refundable credit, you get the balance of the credit back. A Deduction can only lower your taxable income. You can't get money back from a deduction.
What s the DIFFERENCE between a  Deduction and a Credit  A Credit directly decreases your taxable liability. A Deduction l...
DEDUCTIONS “Ensuring your client gets All The Tax Deductions Possible When Filing”
DEDUCTIONS     Ensuring your client gets All The Tax Deductions Possible When Filing
What Are Tax Deductions? OVERVIEW The federal tax law allows you to deduct several different personal expenses from your taxable income each year. This can really pay off during tax season because the reduction to taxable income reduces the amount of income that is subject to federal income tax. However, not all expenses you incur will provide tax savings; the Internal Revenue Code is very specific about the types of expenses you can deduct and the taxpayers who may claim them. Above the line deductions Personal income tax returns require the calculation of Adjusted Gross Income (AGI) before arriving at the final taxable income amount. The deductions you may take to arrive at AGI tend to be less restrictive than below-the-line deductions since their limitations have no relation to your AGI. As an example, the moving expense deduction for work-related relocations allows you to deduct the full cost of your move provided you meet the deduction-specific requirements. You don’t need to reduce the deduction when your AGI reaches certain levels. Similarly, the alimony payments you make to a former spouse are fully deductible irrespective of your AGI. Below the line deductions Deductions you take below the line reduce your Adjusted Gross Income (AGI). Many of these deductions have varying limitations that directly relate to the amount of AGI you report. Most below-the-line deductions relate to the expenses you itemize on the Schedule A attachment to your personal income tax return. Some common itemized deductions include medical and dental expenses and work-related miscellaneous deductions.
What Are Tax Deductions  OVERVIEW The federal tax law allows you to deduct several different personal expenses from your t...
2015 Deductions for Individuals Work-Related Health Care • • • • • • • • • • Deductible Business Expenses Standard Mileage Rates Home Office Business Use of Car Business Travel Expenses Bad Debt Business Entertainment Expense Depreciation and Amortization Investments • • • Sale of Home Individual Retirement Arrangements (IRAs) Capital Losses Education • • • • Student Loan Interest Tuition and Fees Deduction Work-Related Educational Expenses Teacher's Educational Expenses Medical and Dental Expenses Health Savings Account (HSA) Itemized Deductions • • • • • • • • • • • • Standard Deduction Deductible Taxes Property Tax Real Estate Tax Sales Tax Charitable Contributions Gambling Loss Miscellaneous Expenses Interest Expense Home Mortgage Interest Union/Club Expenses Moving Expenses Miscellaneous Deductions • • Alimony Paid Casualty, Disaster and Theft Losses
2015 Deductions for Individuals Work-Related  Health Care                                            Deductible Business E...
Standard Deduction vs. Itemized Deductions “Should I itemize or use the standard deduction?”
Standard Deduction vs. Itemized  Deductions    Should I itemize or use the standard deduction
Standard Deduction vs. Itemized Deductions Should I itemize or claim the standard deduction? It depends. Choose the method that results in the largest deduction for you. The value of your itemized deductions might be more than the amount you'll receive as a standard deduction. If so, you should probably itemize. Otherwise, it's usually better to claim the standard deduction. Don't forget to take the state's tax results into consideration when making your choice.
Standard Deduction vs. Itemized  Deductions Should I itemize or claim the standard deduction  It depends. Choose the metho...
Standard Deduction Standard deduction The standard deduction is a fixed dollar amount that reduces the income you’re taxed on. Your standard deduction varies according to your filing status. In 2015, the standard deduction is: • For single or married filing separately -- $6,300 ($6,200 in 2014) • For married filing jointly or qualifying widow(er) -- $12,600 ($12,400 in 2014) • For head of household -- $9,250 ($9,100 in 2014) Your standard deduction increases if you're blind or age 65 or older. It increases by $1,550 if you're single or head of household and by $1,250 if you’re married or a qualifying widow(er). About two out of every three returns claim the standard deduction. The standard deduction: Allows you a deduction even if you have no expenses that qualify for claiming itemized deductions. It eliminates the need to itemize deductions, like medical expenses and charitable donations. Lets you avoid keeping records and receipts of your expenses in case you're audited by the IRS.
Standard Deduction Standard deduction The standard deduction is a fixed dollar amount that reduces the income you   re tax...
Standard Deduction vs. Itemized Deductions You can either claim the standard deduction or itemize your deductions -- whichever lowers your tax the most. Itemized deductions Itemized deductions also reduce your taxable income. Ex: If you're in the 15% tax bracket, every $1,000 in itemized deductions knocks $150 off of your tax bill. You might benefit from itemizing your deductions on Form 1040, Schedule A if you: • Have itemized deductions that total more than the standard deduction you’d receive • Had large, uninsured medical and dental expenses • Paid mortgage interest and real estate taxes on your home • Had large, unreimbursed expenses as an employee • Had a large, uninsured casualty (fire, flood, wind) or theft losses • Made large contributions to qualified charities • Had large, unreimbursed miscellaneous expenses However, your itemized deductions might total less than your standard deduction. If so, you you would claim the standard deduction rather than the itemized deduction. If your itemized deductions are more than the standard deduction you would claim the itemize deductions rather than claim the standard deduction. You might want to do this if you'd pay less tax. This can happen if you itemize on your state return and get a larger tax benefit than you would if you claimed the standard deduction on your federal return.
Standard Deduction vs. Itemized  Deductions You can either claim the standard deduction or itemize your deductions -- whic...
Itemized Deductions • • • • • • • • • • • Deductible Taxes Property Tax Real Estate Tax Sales Tax Charitable Contributions Gambling Loss Miscellaneous Expenses Interest Expense Home Mortgage Interest Union/Club Expenses Moving Expenses
Itemized Deductions                                              Deductible Taxes Property Tax Real Estate Tax Sales Tax C...
CREDITS “Become credit savvy and so your clients can be Refund Happy”
CREDITS     Become credit savvy and so your clients can be Refund Happy
What Are Tax Credits? OVERVIEW Credits work better than deductions as refund boosters. For each credit dollar, your taxes go down a dollar. A tax credit is a dollar-for-dollar reduction of the income tax you owe. Tax credits reduce the amount of income tax you owe to the federal and state governments. Credits are generally designed to encourage or reward certain types of behavior that are considered beneficial to the economy, the environment or to further any other purpose the government deems important. In most cases, credits cover expenses you pay during the year and have requirements you must satisfy before you can claim them. index returns 0 for the first paragraph all will be ignored How tax credits work A tax credit is a dollar-for-dollar reduction of the income tax you owe. For example, if you owe $1,000 in federal taxes but are eligible for a $1,000 tax credit, your net liability drops to zero. Some credits, such as the earned income credit, are refundable, which means that you still receive the full amount of the credit even if the credit exceeds your entire tax bill. Therefore, if you owe $400 in tax and claim a $1,000 earned income credit, you will receive a $600 refund.
What Are Tax Credits  OVERVIEW Credits work better than deductions as refund boosters. For each credit dollar, your taxes ...
Credits for Individuals Family & Dependents • • • • • Earned Income Tax Credit Child and Dependent Care Credit Adoption Credit Child Tax Credit Credit for the Elderly or Disabled Health Care • • Premium Tax Credit (Affordable Care Act) Health Coverage Tax Credit Income and Savings • • • • • • • Earned Income Tax Credit Saver's Credit Foreign Tax Credit Excess Social Security and RRTA Tax Withheld Credit for Tax on Undistributed Capital Gain Nonrefundable Credit for Prior Year Minimum Tax Credit to Holders of Tax Credit Bonds Education • • Lifetime Learning Credit American Opportunity Tax Credit Homeowners • • • • Mortgage Interest Credit Residential Energy Efficient Property Credit Nonbusiness Energy Property Credit Low-Income Housing Credit (for Owners) Electric Vehicle Credit • • • • Plug-in Electric Drive Motor Vehicle Credit Plug-in Conversion Credit (Section 30B(i)) Alternative Fuel Vehicle Refueling Property Credit (Section 30C) New Qualified Fuel Cell Motor Credit (Section 30B(b))
Credits for Individuals Family   Dependents                      Earned Income Tax Credit Child and Dependent Care Credit ...
Refundable vs. Non-Refundable Tax Credits There Are Two Main Types of Credits That Can Reduce Your Tax Bill Tax credits, available through the IRS, can bring you a substantial savings on your Federal income tax bill. A tax credit reduces your tax liability dollar-for-dollar. This means that a $500 tax credit actually takes $500 off your tax balance due. A tax deduction, on the other hand, reduces your taxable income and is equal to the percentage of your marginal tax bracket — for example, if you’re in the 25% tax bracket, a $500 tax deduction will save you $125 in taxes (because 0.25 × $500 = $125). Now you can see why a tax credit is more valuable than a dollar-equivalent tax deduction. However, not all tax credits are created equal. Most tax credits are nonrefundable, which means that any excess amount expires the year in which it is used and is not refunded to you. However, some tax credits are refundable and can actually increase your tax refund. Whether or not a tax credit is refundable, it is worth the effort to make sure you are claiming every credit that you’re eligible for.
Refundable vs. Non-Refundable Tax  Credits There Are Two Main Types of Credits That Can Reduce Your Tax Bill Tax credits, ...
Refundable Credits Refundable Tax Credits Refundable credits are the most versatile type of tax credit. These credits are treated just like tax payments that you make to the IRS, such as income taxes withheld from your paycheck or estimated tax payments that you make throughout the year. In other words, a refundable credit is subtracted from the amount of taxes you owe (after deductions), similar to the way the tax withheld from your paycheck is subtracted from your total yearly tax liability. A refundable tax credit is particularly advantageous because it can reduce your tax liability to below zero. If the amount of a refundable tax credit is more than the amount of taxes due, the difference will be given back to you as a tax refund. If you are already owed a tax refund, the refundable credit will be added to increase the amount of your refund. Here are some examples of refundable tax credits: • Additional Child Tax Credit • Earned Income Tax Credit (EITC) • Health Coverage Tax Credit • Small Business Health Care Tax Credit
Refundable Credits Refundable Tax Credits Refundable credits are the most versatile type of tax credit. These credits are ...
Non-Refundable Credits Non-Refundable Tax Credits Nonrefundable credits are another great way to decrease your tax bill. A nonrefundable credit is subtracted from your income tax liability, up to the total amount you owe. But unlike a refundable tax credit, a nonrefundable credit cannot reduce your tax balance beyond zero. Any unused portion of a nonrefundable tax credit will expire in the year the credit is claimed and cannot be carried over. Some examples of nonrefundable tax credits include: • Adoption Tax Credit • Child Tax Credit • Foreign Tax Credit • Mortgage Interest Tax Credit
Non-Refundable Credits Non-Refundable Tax Credits Nonrefundable credits are another great way to decrease your tax bill. A...
Partially Refundable Tax Credits Partially Refundable Tax Credits Certain tax credits are considered partially refundable because they fit into both categories. In these cases, only a portion of the tax credit can be refunded to you. This type of credit is a bit more complicated — it can be subtracted from the amount of taxes owed and (to an extent) applied to increase the tax refund. The American Opportunity Tax Credit (AOTC) is an example of a partially refundable credit. The maximum credit amount is $2,500 per eligible student, per year. If the credit reduces your tax liability to zero, you can receive up to 40% of the remaining credit amount (up to $1,000) as a tax refund.
Partially Refundable Tax Credits Partially Refundable Tax Credits Certain tax credits are considered partially refundable ...
5th Interview Process “Ways To Increase Your Clients Tax Refund You Need to Think About” Our Interview Process begins with Understanding what questions to ask a client for each Deduction and each Credit to qualify the client. Through due-diligence and research, reviewing your clients tax status, consulting with your client can help them take advantage of several tax deductions and credits that they may qualify for. Asking the right questions will ensure your client doesn't miss any of the deductions or credits they deserve, so they get your biggest refund, GUARANTEED.
5th  Interview Process     Ways To Increase Your Clients Tax Refund You Need to Think About    Our Interview Process begin...
Meeting your Clients Expectations By understanding credits and deductions you can now meet your clients expectations. “What did you get back last year?” $3,000 “Did anything change? You filing the same way?” “What do you hope to get back this year?” $3,000 or maybe a lil more Difference between what your able to find you client in addition money they qualify for expect is your fee. See Example and what they Client expects: $3,000 Preparer with due diligence has client at: $3,600 before fee’s Preparer: “Jon looks like I got you back $3,100 after all fee’s included, how does that sound?” $3,600 - $3,100 = $500 prep fee
Meeting your Clients Expectations By understanding credits and deductions you can  now meet your clients expectations.    ...