Key Takeaways From the Past Tax Season

Tax preparation and filing is an undoubtedly complicated and time-consuming process that has been exacerbated for many of us in recent years.

 Although the procedure for filing taxes remains the same each year, it does evolve due to several advancements, such as technology, and changing tax laws, policies, and provisions. As an accounting firm, you must keep up with the new developments and learn what it means for the future.

Well, the busiest seasons of the year have come to an end. The individual tax return filing deadline for the year has come and gone. As the dust settles, we have several takeaways.

Here are some of the takeaways for CPAs and accounting firms from the last tax season

Nothing is Certain Except Death and Taxes.

The old saying coined by Ben Franklin over 200 years ago rings true even today! Filing Taxes are inevitable, but more important is that you file an accurate return and use e-file and direct deposit to avoid delays. It is best to follow the IRS website and stay on top of all the updates regarding policy changes, tax laws, etc. For instance, considering the unprecedented circumstances around the pandemic and unique challenges pertaining to this tax season, the IRS provides a 5-point checklist to help you speed up tax return processing and prevent refund delays.

Change is Inevitable.

The lax landscape has constantly been changing, and every year is unpredictable. It is crucial to get a clear understanding of the new rules. Every year, complications and delays could lead to a longer wait for tax refunds, and to avoid that, the IRS recommends filing your returns early and filing electronically.

The Early Bird Catches the Worm.

Clients who engaged us early last year were able to maximize their advantage compared to those who didn’t. Planning enabled our outsourced tax preparation team to make early course corrections and to get the most out of provisions in the new law. Also, clients who were highly organized and submitted the required documents for tax prep early fared way better than those who delayed it. Tax procrastinators are likelier to miss tax breaks as their supporting material can’t be found.

An Hour of Planning Can Save You Hours of Doing.

Planning is very important, especially when it comes to tax prep, and it’s never too late to start including tax-efficient strategies in your longer-term financial plan. Also, year-round active tax management can enable you to save more. If you owe money, you’ll want to have a plan, and if you have the cash and don’t want to risk draining your savings or emergency funds, it is best to write a check. Also, it is very important to be prepared for the unexpected. A little preparation can help you save time and money and make the tax season as easy as possible.

Mistakes Happen!

Errors, omissions, and missing deadlines easily occur regarding tax return preparations. You might enter incorrect details, misinterpret a particular tax law or misconstrue your client’s facts. You might notice these mistakes before an IRS audit, too, sometimes. Irrespective of when or how you become aware of an error, it is all the more exasperating that the outcome isn’t within your direct control. Even though tax laws are complicated, the most common tax return errors, according to the IRS, are surprisingly simple. You can avoid several mistakes by filing electronically. Tax software helps with all the math, flags common errors, and prompts you in case of missing information. A reputable offshore tax preparer can also help avoid mistakes.

Never Hesitate to Open New Windows in Your Life.

About 51% of Americans file their own tax returns. While they might feel comfortable navigating complex tax forms and be patient enough to gather all the necessary information to prepare their own tax returns, things might get difficult when their financial situation grows more complex. A professional tax preparer or an offshore tax preparation expert can help you gather the right tax and financial data from all your investment accounts, get maximum refunds, provide advice tailored to your unique financial situation and prepare your income tax returns. That is why top accounting firms and CPAs outsource their tax preparation services.

Communication is Key.

A strong connection between clients and you are very important, built on effective communication. With a robust communication system in place, firms can readily acquire data. Clients can also express concerns and seek clarification on issues that are crucial to them. From instant messaging and emails to phone calls and video calls, you should be able to utilize a variety of tools to enhance communication with your clients.

Wrapping Up

“The hardest thing in the world to understand is the income tax.”

But when we attempt our best to comprehend them, tax seasons never fail to teach us something.

Our key takeaway this tax season is that the new tax landscape provides a lot of potentials for businesses to make genuine, lasting changes. But it all begins with upfront planning, effective communication, and a trusted and dedicated professional tax adviser who is well-versed in tax law.

QXAS provides end-to-end accounting and tax solutions for CPAs and accounting firms operating in the United States. We will be your one-stop destination for all your tax prep needs in the upcoming tax seasons so you can provide your clients with the best outcomes possible.

Over to You

Thank you for yet another successful tax year! If you haven’t yet partnered with us, we encourage you to engage us NOW to help you plan and strategize for the next tax year. Give us a call if you have any questions about your previous taxes or if you’d like to prepare for the upcoming year.