Set up Account Owners and Accounts

To fully utilize the TaxBit Information Reporting platform, it's essential to properly set up Account Owners and Accounts. This step is crucial as it lays the foundation for receiving tax forms, submitting tax documentation, and sending transaction or form data.

In the TaxBit Information Reporting platform, understanding the relationship between Account Owners and Accounts is crucial for accurately setting up your organization’s reporting structure. This relationship is foundational to how data is organized, reported, and managed within the platform.

Account Owners: The Core Entities

An Account Owner represents a real-world individual or entity within the TaxBit system. An Account Owner is essentially standing in for your end users who are responsible for tax obligations. These individuals/entities are characterized by unique identifiers like Tax IDs and are associated with specific Personally Identifiable Information (PII) necessary for tax documentation, including names, TINs, and addresses. The role of an Account Owner is to serve as the central figure to which Accounts are tied, ensuring that tax forms and documentation accurately reflect the entity responsible for tax events.

Accounts: The Transactional Units

An Account is directly tied to transactions and corresponds to an individual end-user Account within the TaxBit system. It holds transaction records and is the primary unit for eligibility assessments and information reporting. Importantly, information reporting is conducted at the individual Account level without aggregating data across multiple Accounts to determine reporting thresholds. Each Account is linked to an individual Filer for accurate reporting and accountability.

Relationship Between Account Owners and Accounts

The relationship between Account Owners and Accounts can be understood as a hierarchy where an Account Owner may have a one-to-one or one-to-many relationship with Accounts. This structure allows for flexibility in handling different organizational and end-user scenarios:

  • One-to-One: Each Account Owner is associated with a single Account. This straightforward relationship is common in applications where an individual can only have one account tied to their email address, such as digital marketplaces or payment providers.
  • One-to-Many: An Account Owner may oversee multiple Accounts. This scenario is typical in more complex arrangements, such as those found in traditional finance institutions where an individual or entity might have several types of Accounts (e.g., multiple IRAs with different characteristics).

Before creating any Accounts, you must first set up an Account Owner. Accounts are directly linked to Account Owners. This setup is important because it ensures that all transactions and tax reports are accurately connected to the right entity, who is responsible for the reporting.

Steps to Set Up Account Owners and Accounts

  1. Set Up an Account Owner: Begin by creating an Account Owner using the POST method for the Account Owner endpoint.
    • During setup, if you have a one-to-one relationship between Account Owners and Accounts, creating an Account at the same time is an option. While not mandatory, it can make managing both elements more straightforward for those cases. Account Owner ID and Account ID can be the same value if there is a one-to-one relationship.
    • Only IDs are required for this step, but specific PII may be necessary later depending on your reporting obligations.
    • For detailed instructions on setting up an Account Owner, please refer to the Account Owner documentation.
  2. Set Up Accounts: If you chose not to create an Account in the initial step, your next action is to establish Accounts using the POST method for the Account endpoint.
    • An account must be linked to an Account Owner at the time of creation.
    • This step is necessary for managing transaction or aggregate form data and ensuring that eligibility and reporting requirements are met at the Account level.
    • For detailed instructions on setting up an Account, please refer to the Accounts documentation.