How do I deduct tax preparers fee out of a tax payers refund, after efile, tax preparation?
Im going to be preparing taxes for friends and family, and dont want to charge them upfront.
- taxreffLv 71 decade agoFavorite Answer
If I'm understanding the question correctly, you can't. Preparers are not permitted to receive a portion of their client's refund directly from the IRS.
- Anonymous1 decade ago
You have to have a deal with a bank set up.
Eg, when you file, the bank sets up an account for the refund. Then when the refund comes in to them, you deduct the fees and then issue a check to the taxpayer.
I doubt you can afford to do this. (If you are charging to prepare taxes, be sure to put your name and ID on each return and double check if your state has licensing requirements for paid preparers. If the state does and you aren't licensed, you can't charge.)
- chatsplasLv 71 decade ago
You need to charge them upfront. Maybe get a postdated check due on the date of refund?
You'd have to be incorporated and jump through all sorts of hoops to be able to do that.
- JudyLv 71 decade ago
You can only do that if you are set up with a bank to handle it, and if you are just doing returns for friends and family, I strongly doubt that you are set up that way. Either charge them up front, or have them owe it to you when they get their refunds, and hope they remember to pay you.
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- 5 years ago
assuming you have registered and received your PTIN