Hello Izania & Happy New Year!
With Tax season upon us once again, I want to take some time to inform you on some very important information concerning tax preparation.
- 1) We get many calls to our tax office from filers who wish to have their taxes prepared and filed using only last pay stubs. We want to inform you that this practice is in violation of IRS Rules and Regulations and have never been a practice of our office "TaxPlus 1040". The IRS prohibits electronic filing of tax returns using paystub information. Tax Return income from employment or retirement can only be electronically filed after the receipt of W2's, W2G's, and or a 1099R. The only form that can substitute for the above mentioned forms is the form 4852 which is only used after all attempts to receive the fore mentioned income forms have been exhausted. (prepare for a delay due to IRS review and audit) Any tax preparation agency that tells you they can file your tax return electronically with a last pay stub is in violation and risk warning, sanction and expulsion from IRS e-File authority.
- 2) Year 2010 opening day for all electronically filed returns are January 15th, this means that no tax returns can be electronically filed prior to this day. What some manipulative offices are doing are doing is suggesting that they can file a return prior to January 15th, to lock in some early traffic. What they are actually doing is preparing the return and sitting on it until January 15th, to electronically file it.
- 3) Refund anticipation loans (commonly referred to as rapid refund) are just that, loans granted based on the projected refund amount. These loans are at an additional cost. Generally these short term loans (in most cases a 1 week to 3 weeks) are at an extremely interest rate when amortized. We at TaxPlus1040 understand that for some people a week or two could be the difference between not rent and homelessness especially after the holidays so we do offer the option but we advise against it if at all possible and we do not charge any fees on top of the bank's fee for the service. We never have and never will and we only use banks that have the lowest fees available to us. The fees for the service are set by the banks not us. Although, providers are allowed to charge a processing fee in conjunction with the bank's fee. Always have your preparer explain the bank's fee for the loan and their fee for processing the loan. There can also be electronic filing fees. We do not charge an electronic filing fee in our office at Taxplus.
- 4) Keep in mind that if any tax office tells you that they can electronically file your return prior to Jan 15th, 2010 or grant you a refund or portion of a refund prior to Jan 15th, are in fact offering you a refund anticipation loan based on your projected refund amount and will not be actually filing your return until Jan 15th. There's a difference between preparation and actually filing. If for any reason the IRS rejects your return or reduce the amount of your expected refund, you are legally obligated to return any overage to the bank. If you don't have the money to return to the bank you will be in serious trouble. It can destroy your credit and prevent you from using the service in subsequent years. These banks communicate electronically with each other and it does not matter where you go for tax preparation banking services. You will be denied the service and they will do what is legally in their power to get their money back.
- 5) The least expensive method for in office tax preparation and electronic filing is to pay the preparer up front and not have it come out of your refund, this cuts out the banks fee for using a banking service to pay for your preparation and have it mailed to you by the IRS. Yes you heard right, the bank charges a fee to have your prep fee come out of the refund and some prepares charge a processing fee with that as well (Not TaxPlus1040). When you pay up front you avoid this fee and your return can still be electronically filed.
- 6) Next best method is to pay up front and have your refund direct deposited into your bank account. The bank still charges a small fee for this service and the tax office may as well but the fee is generally low. The deposit typically occurs in 1 to 2 weeks.
- 7) All other options are very expensive in our opinion and generally include some type of loan action
- 8) Many tax prep offices charge per W2 and charge per form required to file (Not TaxPlus1040). Be sure to ask what you are being billed for. If for any reason after the return have been prepared and you change your mind prior to them actually electronically filing it. You have every right to have your documents returned to you and leave without your return being filed by them. Some tax offices try to hold your documents hostage until you pay them for the time they spent with you. They cannot legally hold your documents as collateral for payment without a court order. Even if you signed a document stating that you will pay them their fee once the preparation process has begun. They can take you to court for their fee but they cannot legally hold your documents as collateral in lieu of their fee. This strong arm trick is used much too often and I'm tired of hearing about it. If they refuse to return your documents keep your composure and politely tell them that you have every intention of paying them the preparation fee only, but they do not have a court order to hold your documents. (Remember you still owe them for their time) but they can't legally hold your documents as collateral for payment. You can also request a bill be mailed to you for their time preparing the return. Be sure to pay it, it's only fair.
Remember that you can always use our online preparation and electronic filing service at http://taxplusEFile.com/ where all state filings are free with paid federal filing regardless of the amount of states you are filing in.
You can also visit our office website http://taxplus1040.com/ for additional tax information.
God Bless (Seek first the kingdom of heaven and all these things will be added to you)
Derrick Henry
