Tax season is a stressful time for taxpayers and their accountants. However, there are ways to make it less, well, taxing for everyone involved. Prepare your clients for Tax Day by sharing the following five tax return tips for making the entire process easier, faster, and less prone to error.
Make sure you have an IRS.gov account
An IRS.gov account will help your clients stay up-to-date on the status of their federal tax returns. They’ll also be able to view the previous year’s tax information, view amounts owed, make payments online and set their communication preferences.
To verify whether someone has an account, they should visit this website, where they can also create an account if they still need to create one.
Gather and organize your tax documents and financial records
Filing a return will go much more smoothly if your clients have all their relevant tax documents on hand and organized digitally or on paper. Some of the documents your clients should gather include the following:
- The prior year’s tax return
- Employer-issued W-2 form
- Forms 1099 issued by financial institutions for income such as pension payments, unemployment, dividends or annuity distributions
- Form 1099-INT for taxpayers who received interest payments
- Form 1099-K or 1099-MISC for contractors or self-employed taxpayers
- Documentation of digital asset transactions
- Dependent information and childcare records
- Form 1098 for homeowners
- Medical billing statements
- Form 1098-T from educational institutions
- Records of charitable donations
Verify your withholdings
If any of your clients received a large tax bill or tax return the previous year, remind them to check their withholdings and adjust as needed. By withholding too little, they’ll get hit with a hefty bill come tax time. By withholding too much, their paychecks might be smaller than they’d like. Also, certain life changes, such as marriage, divorce or the birth of a child, may require a change in withholding.
The IRS tax withholding estimator can help clients determine their most appropriate tax withholding percentage. If you have self-employed clients, remind them that paying quarterly estimated taxes is an option that can reduce their overall tax burden.
Set up direct deposit
Filing electronically and setting up direct deposit is the fastest way for your clients to get their refund. It also eliminates the risk of a refund check getting lost in the mail or stolen. Even taxpayers who file a paper return can sign up for direct deposit. Anyone with a bank account, routing and account numbers is eligible for direct deposit of their refund.
Tips for income tax preparers
Tax season is the busiest and most hectic time of year for any income tax preparer. Follow the tips below to keep yourself organized, reduce your overall stress levels, reduce the potential for errors and be focused enough to give your best to your clients.
Prioritize your tasks
Not everything can be a top priority, even if it seems like it. Each day, identify the truly urgent tasks and take care of those first. Then, move on to important but not immediate tasks. If it helps, create a structured to-do list digitally or on paper, with the highest-priority tasks at the top and lower-priority items at the bottom.
Take time for self-care
In order to best serve your clients and keep yourself on track, be sure to take breaks when you need them. After all, most people work best when they’re well-rested and feeling relaxed. Eat healthy meals, get enough sleep and schedule time to exercise or at least take a quick walk. Whenever you hit a milestone, like completing a certain number of returns, give yourself a small reward for your hard work.
Leverage time and billing apps
Tax return preparation and filling are big enough tasks on their own; you don’t need to add a ton of administrative work. Luckily, several time tracking and billing applications are available that can make it quick and easy to track your hours in real time and invoice your clients. Some examples include FreshBooks, QuickBooks and Harvest. Using these tools will free up your time for what really matters — delivering value to your clients.
Hire additional help
If you struggle to manage the heavy tax season workload, consider bringing on some additional help. After all, additional hands make light work. This doesn’t mean you have to hire a full-time employee; you could hire a part-time helper to take care of administrative tasks or delegate some of your responsibilities to a virtual assistant.
Create a FAQs page or document
Throughout tax season, you may find yourself answering the same client questions repeatedly. When will I get my refund? What documents do I need to send you? Can I sign my return digitally?
To reduce the time spent on these common inquiries, create a “Tax Return FAQs” page on your website. You can even make it a downloadable PDF for clients to print. When someone asks one of the FAQs, direct them to the webpage rather than spend valuable time rewriting the same explanation.
We realize that this is easier said than done in today’s world. However, if you can create windows of time that are 100% (or as close as you can get) distraction-free, you’ll get a lot more done. Set your devices to “do not disturb” and close your door. We recommend setting up a dedicated “focus space” in your office or home. The space should be comfortable enough for long work sessions and have everything you need to stay focused, including snacks, a beverage, pen, paper and any other materials you might want.
Use CRM and task management software
Keeping track of your clients and outstanding tasks is a big job. Wherever possible, use software to help. A Customer Relationship Management (CRM) system can serve as your one-stop shop for all client information, including emails sent, last contact date, industry and personal data — you name it. Some CRM platforms that work well for accountants include Accelo, Keap, Hubspot and Zoho Books. To manage your many tasks, including client outreach, consider a tool like Trello, Asana or Monday.com.
Survive tax season without undue stress
Tax season is busy for everyone, and preparing tax returns is time-consuming for taxpayers and tax preparers. However, by following the above tips, clients and accountants can file their tax returns on time, stay informed on their refund status and avoid potentially costly errors.