Do these 5 things before tax season

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A huge part of your ultimate success in navigating tax season will be the work and efforts you put in before the season actually get going. Proper planning and organization can greatly improve your chances of getting through tax season as painlessly as possible.

Below I’ve outlined 5 things you should do before tax season to get ready for the tax filing season ahead:

Find a tax accountant

Of course this goes without saying, however many do wait until the last moment to find a competent tax CPA to help with their tax returns during tax season. Many taxpayers have already lined up tax CPA for their returns and often CPAs do not take on new clients just before tax season. If you wait too long you’ll be forced to pick from a very limited supply of accountants and given the recent shortage in tax accountants already, you might be stuck without someone to help in March and April.

If you’re still looking for a tax accountant email me at phil@philhogan.com with some detail on what you need and I’ll do my best to help from someone appropriate to help.

Review your filings from last year

You’ll be working hard with your accountant to get through the details of your current tax return preparation and one of the best ways to properly prepare for the current tax year will be to review your prior year returns.

In many cases your prior year return will be very similar to the current year’s tax filings, and by reviewing what was prepared last year you’ll have a much better idea of what tax information will be required for the current year. In many cases clients have yet to even review their prior year returns, so this is an opportunity to work through each page of your return to better familiarize yourself for what will be prepared this year.

You’ll almost always be more successful if you set some specific goals for tax season

I can also be helpful to keep a list of items that have changed from last year or transactions that occurred in the year that you’ll want to inform your accountant about.

Organize what information you have already

Starting early is key if you want to have a successful tax season and ensure your tax returns are filed well before the masses.

Don’t make this too complicated as a simple tax organizational strategy can be very effective.

Compile all paper copies of current tax documents into a folder, including all tax notices you receive from prior years. As information arrives via mail continue to add these documents to the folder. Have one folder for both you and your spouse and ensure to add to the folders as soon as information arrives. You’ll be receiving tax slips and other tax information from January into April, so maintaining a system for this will be key.

For electronic documents do the same, however maintain some tax folders in our computer and pull information from your email into this folder. Make sure this folder is properly backed up and continue adding to it until it’s time to pass along your information to your tax accountant.

Set some goals

You’ll almost always be more successful if you set some specific goals for tax season. In this case you might use the old SMART acronym for setting goals:

Specific
Measurable
Attainable
Realistic
Timely

Here’s an example of how you might set your tax season goals:

Specific – I will get all of the tax information I have to my accountant by the end of February at the latest (you can’t really control when the accountant actually gets to the return however).

Measurable – I have supplied and checked off all of the required information requested by my accountant (see below).

Attainable – Yes, this should be very attainable.

Realistic – If you do the right things early, this will be very realistic.

Timely – Yes, see February deadline above.

Obviously this might be too much detail for tax season goal setting, but I think you get the point. Setting specific goals for how you’ll be attacking tax season can definitely be the difference between a successful and not so successful tax season.

Don’t make this too complicated as a simple tax organizational strategy can be very effective.

Follow your accountant’s directions

In my opinion this is the most important consideration of them all. You have to understand that your tax accountant not only has a limited amount time to file your returns they also have hundreds of other clients to help during March and April. Knowing this is the case, you should be attempting follow your accountants directions as closely as possible to ensure they have everything they need to finish up your returns in the most efficient way possible.

In most cases your accountant will send out some type of communication early in the season to explain changes to the current tax year and the information they require. They might also include a checklist in the package. Also note that some accountants are requesting initial retainers before they can start working on your return. This might seem unfair and impersonal, however a very small amount of non-paying clients can certainly ruin it for everyone else. If you’re accountant is asking for pre-payment I would suggest simply paying for the retainer to get into the queue.

Most people fall victim to procrastination and fall behind early.

This might be the most important part of them all…

Once you hand over all your tax information and complete the accountant’s checklist you’ll want ensure you answer everything single email/call in the most complete and accurate way possible. I think it might just be human nature, however for some reason lots of clients quickly read emails from their accountant and either respond with the wrong information or respond with incomplete information.

I would highly suggest that you read each email carefully and respond as quickly and as accurately as possible. The quicker you can get answers and information to your accountant the quicker your returns will be prepared. Also, do your best to respond completely in one email and not break up your reply into separate emails.

Try to remember this….

Your accountants does not want to drag out the tax return preparation process. If you have a good tax accountant their incentive is to get the returns done as quickly and as efficiently as possible. Remember, you’re not the only client and they have hundreds of other returns to prepare and get filed.

Conclusion

I really do hope that the information above has been helpful and has also motivated you to attack tax season with a purpose. None of us want our tax returns hanging around for months, but most people fall victim to procrastination and fall behind early.

Make a concerted effort to get ahead of the season and I promise you won’t regret it.

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