Revenue & Products

What are bank products for tax preparers?

If you serve everyday families, many of your clients won't want to pay a prep fee out of pocket in February. Bank products solve that — when they're offered honestly.

By Tiffany Hill Moore, Founder & former auditor · Updated July 2026

The plain-English definition

A bank product is a service from a tax-industry bank that sits between the IRS and your client's pocket. The most common is the refund transfer: the client's refund is deposited to a temporary account, your prep fee is deducted from it, and the client receives the rest. The client pays you out of the refund instead of out of pocket.

The main types

• Refund transfer — prep fees come out of the refund; the client pays nothing up front
• Refund advance — the client receives a portion of their expected refund early, as a loan from the bank
• Prepaid card disbursement — refunds delivered to a card for clients without bank accounts

Why they matter for volume

Offices that serve working families do the bulk of their season in a few weeks, and most of those clients choose no-upfront-fee service when it's available. If you can't offer a refund transfer, many of them will go to the office down the street that can. Bank products are how small offices compete on convenience with the national chains.

The honest tradeoffs

Bank products carry fees, and the client pays them. That's not a scandal — it's a convenience choice — but it must be disclosed clearly and in writing. The industry's bad reputation comes from offices that bury the fees. Show the client exactly what the bank charges and what they'll receive, and let them choose. Transparent pricing isn't just good ethics; it's what keeps clients coming back.

Should you offer them?

If your market includes refund-driven families: almost certainly yes, through software with bank products properly enabled and a bank you've registered with. If your book is business owners and planning clients who pay invoices, they matter less. Match the product to the clientele — and disclose either way.

Frequently asked questions

What is a bank product in tax preparation?

It's a service from a tax-industry bank — most commonly a refund transfer — that lets your prep fee be deducted from the client's refund so the client pays nothing out of pocket at filing.

How do preparers make money from bank products?

The preparer's prep fee is collected from the refund through the bank instead of directly from the client. Some banks also pay offices incentives on volume; reputable offices disclose all fees either way.

Do clients pay extra for bank products?

Yes — the bank charges a fee for the service, which the client pays out of the refund. Ethical offices disclose the exact fee in writing before the client chooses it.