“Going The Extra Mile for Your Client”
What Have We
Learned So Far?
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.
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
We learned: “How To Market” and the importance of
Owners: Market for Managers, Preparers,
Marketers and Client’s
Managers: Market for Preparers, Marketers and
Preparers: Market for Marketers and Clients
Clients: Because of the quality of Service, your
Clients will do the marketing for you and your office!
We learned: UFS 1040 Pro Software
Most Commonly Used Forms: Questionnaire, Income
Statements, Credit forms.
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
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?
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.
3 Important Questions You MUST
Ask EVERY Client
Our Interview Process starts with 3 Simple Questions: We Ask the
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.)
Question 1: (Tax professional) “Terry how much did you get back on your tax return last
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
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?”
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
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.
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
“Ensuring your client gets All The Tax Deductions Possible When Filing”
What Are Tax Deductions?
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
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.
2015 Deductions for Individuals
Deductible Business Expenses
Standard Mileage Rates
Business Use of Car
Business Travel Expenses
Business Entertainment Expense
Depreciation and Amortization
Sale of Home
Student Loan Interest
Tuition and Fees Deduction
Teacher's Educational Expenses
Medical and Dental Expenses
Health Savings Account (HSA)
Real Estate Tax
Home Mortgage Interest
Casualty, Disaster and Theft
Standard Deduction vs. Itemized
“Should I itemize or use the standard deduction?”
Standard Deduction vs. Itemized
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.
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 vs. Itemized
You can either claim the standard deduction or itemize your deductions -- whichever lowers
your tax the most.
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.
Real Estate Tax
Home Mortgage Interest
“Become credit savvy and so your clients can be Refund Happy”
What Are Tax Credits?
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.
Credits for Individuals
Family & Dependents
Earned Income Tax Credit
Child and Dependent Care Credit
Child Tax Credit
Credit for the Elderly or Disabled
Premium Tax Credit (Affordable Care Act)
Health Coverage Tax Credit
Income and Savings
Earned Income Tax Credit
Foreign Tax Credit
Excess Social Security and RRTA Tax
Credit for Tax on Undistributed Capital
Nonrefundable Credit for Prior Year
Credit to Holders of Tax Credit Bonds
Lifetime Learning Credit
American Opportunity Tax Credit
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
Refundable vs. Non-Refundable Tax
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 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
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
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
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.
“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,
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
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
$3,600 - $3,100 = $500 prep fee