Planning for Your Next Tax Filing Season

After 40 years of tax and accounting experience, there are certain things you and your preparer can do to make for a smooth filing process.  The following are a few suggestions.

1. Review your individual or business tax status during the course of your tax year, not just at year end. Proper tax planning can help in minimize tax liabilities. 
2. Don’t overpay taxes. Taxpayers are only required to pay the amount legally owed.  Don’t give the government an interest free loan by substantially overpaying your taxes.  Regularly review your withholding and estimated tax payments to ensure you’re paying the proper amount. If necessary, seek a professional to help with withholding or estimated payment questions.
3. Choose the right preparer.  Attorneys, Certified Public Accountants and Enrolled agents have different responsibilities, educational requirements, and legal standards that must be adhered to.  An attorney may not be the appropriate preparer if you have only one W-2 and use only the standard deduction.  
4. Make sure documents are organized and properly compiled and maintained throughout the year.  Not many professionals want to fix bookkeeping problems,

organizing shoe box receipts, etc. before filing your return. If your preparer has to spend additional time organizing documents, get ready to pay more for the preparer’s services.  

• Do not expect your preparer to make documentation up for you.  Remember, you are signing your return under penalties of perjury.  And remember a person who is dishonest enough to make up information may have no problem turning you into the IRS for filing a false return. Many preparers are requiring proof of transactions.
• Keep organized proof of records for approximately 6 years. This will greatly help in the event of an audit.  When I worked in corporate America, the rule of thumb was six years.  However, this may have changed so check with your preparer.
• I prefer that my clients give me scans or records which I can copy and return.   There are many changes occurring in the accounting profession with many professionals retiring and unfortunately passing away.  In addition, there are disasters occurring which destroy records.  Having duplicate records that are maintained in separate locations can help in the event of disasters.
• Do not submit documents to your preparer at the last minute.  Most preparers will give you the due date of your return in advance. Providing information at the last minute may result in substantially increased fees and may result in the preparer’s refusal to prepare the return.
• Be honest with your tax preparer about your ability to pay.  Payment arrangements can be made with the preparer and the IRS.  
• Preparers are usually paid for specific returns and not for unlimited access.  If you are calling your preparer for items unrelated to your return, you may have to pay an extra fee.
• If you have a series of questions for your preparer, make an appointment with the preparer to discuss your specific issue.  Please keep in mind that your preparer probably has additional clients and frequent interruptions without appointments make working relationship strained.  
• Finally, if you have complicated facts, submit questions with full facts in writing and expect your preparer to do the same with written responses.  This will avoid future misunderstandings.  Memories can be short.  I can’t tell you how many times I hear “don’t you remember when I told you…”

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