By Debbie Gregory.

It’s tax time again, and many Americans who are uncomfortable with doing their own tax returns will hire a third party to do them. While there are many legitimate professional tax preparers who have solid reputations, not all tax preparers have your best interests at heart.

For example, the “Go Navy Tax Service” company, which was deemed off limits by the Marine Corps and located near Marine Base Camp Pendleton in California.  It is alleged that this would lure young Marines with promises of free tax preparation and other perks and subject them to high-pressure sales tactics to get them to deposit their refunds into various financial products.

There are very limited requirements for any type of certification, training, registration, or competency testing for tax preparers.  Anyone who is paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number but that is about it.

There are three areas to check out when looking into a someone to prepare your taxes.   They include how long the preparer has been doing taxes, how much experience they have, and how they are making their money by doing your return.

In addition to the above alleged tactic used by Go Navy Tax Service, other red flags include a return with creative deductions, or any fabricated information in order to increase the size of your refund, or a “cash only” payment policy. Be wary of anyone promising large refunds.

Do not under any circumstances sign a blank return or allow your refund to be deposited into any bank account other than your own. Always double-check the tax forms before signing them and mailing or e-filing them. You’re the one who has to answer if you are audited by the IRS, and you could be in serious trouble for providing fraudulent information. Double check both the routing number and the account number to make sure they are yours and the refund is not going to anyone else.

Of course everyone wants to receive the largest refund possible, but don’t let the promise of a big payoff keep you from doing a thorough check on your tax preparer.

Many military installations and numerous community locations offer free tax preparation assistance through the IRS’ Volunteer Income Tax Assistance (VITA) programs.

For more military-specific resources, visit the IRS military page at https://www.irs.gov/individuals/military

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

When your small business faces a cash flow issue or sluggish accounts receivable, one alternative to consider is factoring.

Factoring is when a business sells their accounts receivable or invoices to a third party, known as a factoring company, at a discount. In a typical factoring arrangement, the client (you) makes a sale, delivers the product or service and generates an invoice. The factor (the funding source) buys the right to collect on that invoice by agreeing to pay you the invoice’s face value less the discount, which is typically 2 to 6 percent. The factor pays 75 percent to 80 percent of the face value immediately and forwards the remainder (less the discount) when your customer pays.

Even though invoices are sold to the factoring company at a discount, the arrangement gives your business immediate funds for the invoices.

Once used mostly by large corporations, factoring is becoming more widespread as it provides a win-win situation for both parties involved. Factoring is not a loan; it does not create a liability on the balance sheet or encumber assets. It is the sale of an asset; in this case, the invoice.

Factoring usually consists of two parts, beginning with the advance, and ending with the rebate,

One of the advantages of factoring is that your company gets money quickly rather than waiting the usual 30 or 60 days for payment. After sending an invoice to a factoring firm, a business can usually have money in its hands within 24 to 48 hours. Another advantage is that you can use the instant cash to generate growth or buy needed equipment. Furthermore, unlike traditional bank loans, factoring doesn’t require you to risk your home or other property as collateral.

On the downside, factoring will have an impact on your profit. And once you accept cash for your receivables, you give up a measure of control. For example, the factoring company could deny your ability to do business with a particular customer if they have a poor credit history or rating.

Factoring can be a great solution when your business needs a solution to short-term cash crunches. To find the best factoring company, make sure you understand your business’s needs and ask the right questions of the factoring companies, taking care to avoid getting locked into contracts or paying hidden fees.

Veteran and Military Business Owners Association, VAMBOA,