Tax Prep Advice
Federal tax returns are due by April 15 every year. January 1 through April 15 is a busy time for most tax preparers. It's easy to overlook important deductions or make clerical errors when you're preparing a high volume of tax returns. As a paid tax preparer, you're expected to prepare tax returns in an error-free fashion, while employing the high ethical standards possible. Here's some tax prep advice to help you prepare tax returns efficiently and accurately.
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Getting Organized
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Make sure you have all the taxpayer's documents, like W-2s, statements of mortgage interest paid or student loan interest paid. If your client has dependents, make sure they have the name, date of birth and social security number of their dependent(s).
It helps if your client has a copy of her tax return from the previous year. You can review the taxpayer's prior tax return to get information, such as whether she itemized or used the standard deductions. This can give you an indication as to what you'll need to do for this year's tax return.
As you get ready to conduct your tax interview, note any changes your taxpayer may have undergone that may change her tax situation. For example, if your client got a higher-paying job, her taxable income may have increase as a result.
Conducting a Tax Interview
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Inform your client that you'll be conducting an interview regarding his tax information and that you'll need to ask some personal questions. This helps set expectations for your client, and helps you avoid questions like "why are you asking me that?"
Discuss what you're doing for your client at every step. Engage your client in dialogue throughout the preparation process. Answer all client questions. Educate your client with relevant information and advice that could help lower taxable income. As a tax professional, this is how you can demonstrate your commitment to helping your client.
While you're entering the client's information, ask your client about major life changes that may have occurred through the year, like getting a divorce or having a baby. Your interview should come off as unscripted and conversational in tone.
Full Disclosure
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Always disclose your fees upfront. Print a good faith estimate for your client. This gives them a copy of all your fees in writing. This helps avoid any discrepancies and communication errors.
Review the Return
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Review the return with your client. Check your return for errors and omissions before printing a copy for the taxpayer. Highlight any changes from last year to this year. Congratulate your client. If possible, set a date and time to prepare your client's taxes next year.
Always ask for referrals. By now, your client should feel like you went the extra mile for him, so asking for a referral becomes much easier. Be enthusiastic and thank your client for his business.
Ethical Considerations
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Never share your taxpayer's personal information with anyone. Avoid reading important information out loud, such as your client's social security number. Keep client information concealed or put away so others can't see it. Whenever possible, show your client information as opposed to speaking it out loud.
After you've completed your client's tax return, shred all unnecessary documents. File a copy of the tax return documents in a secure area. Tax preparers usually keep clients' tax returns on file for three to five years, in case of audits.
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