6 Ways to Become Your CPA’s Favorite Client This Tax Season in 2021

Establishing a good relationship with your accountant can result in a number of benefits including faster turnaround times, lower fees, and better proactive planning. Becoming your accountant’s favorite client this tax season should save you money and can be as simple as following these few guidelines.

1. Start Early

Although the traditional tax filing deadline is April 15th (extended to May 17th this year) the best time to piece together your tax information is in February. By that time, you will have likely received the most common forms necessary to complete your taxes. Start to expect receiving documents like your W2 (from your employer), a 1098 (if you have a mortgage), your 1099s (savings or investment account activity), and your Social Security benefit statement towards the end of January. By mid- to late-February, almost all of your data should be available.

Getting your information to your accountant early may result in a quicker turnaround and could result in a faster refund check and a smaller tax prep fee.

2. Stay Organized

Many accountants send a Tax Organizer at the beginning of the year based on the information you provided on the previous year’s return. This organizer is a great place to start your checklist for forms or statements you may need to provide.  If you handle most of your finances online, setting up a “2020 Taxes” folder on your desktop can be an easy way to collect and aggregate information before sending it over.

Generally, the more complete your “package” is before its send to your accountant, the easier it will be for them to prepare the return. Remember, often less time = less fees.  Tracking down 1-2 extra documents should not delay the delivery of your information.   Sending everything piecemeal is likely to cause duplicated work and can result in overlooked items and a higher tax prep fee.

3. Keep your CPA informed of Life Events

If you have experienced a significant life event during the tax year, such as getting married, divorced, moved, had a child, changed employment, or if you have a child attending college for the first time, it is imperative that you notify your accountant as they prepare your tax return. Your first call to share the news isn’t likely to be to your accountant; however, these life changes can entitle you to deductions, credits, or at the minimum may require additional information to file your tax return.  When you’re providing your tax data to your CPA, it may be helpful to run through anything significant that took place in your life over the last 12 months.

4. Be Honest

The U.S. tax system is based on voluntary compliance- meaning you are ultimately in control over what is or is not reported on your tax return. While this may sound like it’s ripe for fraud or significant misrepresentation, the Internal Revenue Service automatically receives many of the documents you provide to your CPA. Because of this complex system of verification and irregularity screening performed at the IRS, if you do not report certain income or overstate categories like charitable deductions or medical expenses, your return may be flagged for audit. Accordingly, the burden of proof is on you as the taxpayer, so it is important to provide your accountant with accurate financial information. It is their job to ensure you pay the taxes you legally owe and not a penny more.

5. Be Understanding

Your tax preparer likely spends half of his or her billable hours in a given year working between March 1st and April 15th. This can and likely does mean a 7-day workweek consisting of 12+ hour days. If you do not get your data to them until April 1st, you may have to file an extension for April 15th. Filing an extension is not abnormal and millions of Americans do so every year. As a reminder, filing an extension does not delay your obligation to pay taxes but rather it gives you more time to file all of the appropriate paperwork.

6. Engage with your Wealth Advisor

Encouraging an open line of communication between your wealth advisor and your accountant can help reduce missed information and can fine tune your quarterly estimated payments.  Your wealth advisor can provide your accountant with real-time projections of income or capital gains within your portfolio and can proactively plan on your behalf. Encouraging this collaboration will result in less headaches for you during tax time and allow you to gain better advice throughout the year.

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