QX Earns 2022 Great Place To Work Certification    Learn More x

Topics: Industry, Outsourcing, Tax

Optimizing Tax Preparation in Tax Season 2022 – 5 Best Practices

5 MIN READ | Posted on December 15, 2021
Written By Indrajeet Pradhan

5-benefits-of-outsourced-tax-returns

A critical time for any accounting firm is the tax season. It is the season when they are the busiest, and by association, this is also the time when they can generate a lot of revenue. On-time and error-free tax preparation is the need of the season. This helps avoid delays, fines, and penalties. More importantly, if you are on top of your reporting, you can manage client expectations better, and no client will come to you expressing disappointment.

We are now staring tax season 2022, and it will be a good idea to take a closer look at how firms can improve tax preparation to grow their reputation further. Also, adhering to optimal preparation standards ensures very little back and forth between you and the client. This saves time, which can be used to take on more work.

The Link Between Outsourcing Taxation Services and Tax Reporting

Tax season is tough for accounting firms, accountants, and tax preparers. They are battling overwhelming odds day in and out, and staying on top of tax preparation can be a problem. You don’t want to adopt a reactive approach to this overall process, but a proactive one. With tax return preparation outsourcing, outsourced tax preparers undertake time-consuming tax preparation work, while your in-house team can manage all tax advisory. If tax season 2021 has taught us anything, it is this – tax preparers need to constantly keep on top of changing federal and state tax legislation.

The Ultimate Guide to Outsourcing Tax Preparation

This guide is to help firms think of outsourcing in a strategic manner, rather than just cost-savings.

Download

 

When you outsource tax preparation services, some companies do not just calculate taxes but also keep an eagle eye out for any changes in the tax landscape. This is one massive weight off your shoulders. They keep you up to speed, and also implement these changes without you having to worry about them.

Now that you know why tax outsourcing is such a good idea, let’s take a look at the best practices that will help your firm own Tax Season 2022 from the tax preparation perspective:

Due Dates are the Key

It would help if you tracked due dates like a hunter stalking his prey. Alright, just kidding, but it is essential to make sure your firm and its clients know the due dates. There can be different due dates for filing information and when recipients are provided their tax forms. You don’t want to miss these dates, and being aware of them means you can file a report/tax on time.

It’s not just the IRS that has unique due dates, States have special dates as well, and if returns are not filed by the due date, the person can be penalized by the IRS and States. You don’t want this person to be your client.

The problem here is that there is that slight chance, however small, that your firm can miss dates. This isn’t about being inexperienced; it is just that there is just so much to stay on top of, in the tax season. And, more often than not, you have a team that can barely keep up with all the tax work coming their way.

Due Date Communication

As an accounting firm, you work with many businesses wherein multiple people are in charge of year-end reporting. They do not have the same responsibilities as far as data extraction is concerned, and will extract data from diverse systems and then send it to accounting firms.

If pertinent processes are not organized, this can create a problem with not only extracting the correct information, but also extracting this information promptly. If files are sent late to your firm, it sets the stage for a perfect storm of back and forth between your firm and the client.

This is also true in the case of individuals wherein they might be left scrambling to send in the correct information if they are not aware of upcoming due dates.

Therefore, accounting firms must convey various due dates to their clients. This will help them deliver all necessary information on time and ensure your firm can work on tax preparation in time.

Focus on Data Quality

You should give your firm enough time to ensure that the information provided by a client is correct and meets the requirements of both State and federal tax reporting requirements. You don’t want to be caught in a situation wherein you either have incorrect or redundant data, which results in a never-ending back and forth between you and the client. Tax outsourcing can ensure you can plan your tax season early and are on top of all the tax season informational requirements. This will ensure that the quality of data provided to your firm by its tax clients is on point.

Communicating Changes to Clients

There are occasions when the requirements change compared to previous years, and this, in effect, should also be conveyed to clients. Let’s say there is a critical regulatory change that has been implemented. As a firm doing tax preparation, you are well aware of this change as typically, a lot of communication occurs between IRS, States, and tax professionals. But, are your clients ever of this change, or do they understand its significance for tax preparation?

A firm might face a barrage of client questions around tax changes if they become aware of these at the last minute. This is why you must adopt a proactive approach and convey all change at the opportune time to clients, so they in turn are prepared to deliver the kind of information you need.

Think from a Long-Term Perspective

There is no doubt that tax preparation is a time consuming exercise. The question is, how do you fix this? You cannot say you don’t want to do it because that’s not an option. The solution here is to move your compliance tasks like tax preparation to a tax return preparation outsourcing firm; this allows you to free up time by scaling your capacity. Outsourcing taxation services will help you implement a sustainable process that ensures you are on top of every activity that moves the tax preparation process forward.

To Conclude

Outsource tax preparation to make the most of the tax season. From a low margin, time-consuming activity, tax preparation can boost your revenue. But, this can only happen if you can do more taxes and at the same time offer some advisory services on top of the usual benefits. To do this, you need a team, and more importantly, a team that has time. This can happen only if you outsource taxation services.

To know more about how you can grow your revenue during tax season 2022, call us @ +1 862 946 6565 or email @ [email protected]

Book a Consultation

We hope you enjoyed reading this blog. If you want our team to help you resolve talent gaps, reduce costs and transform your business operations, just book a call.

Indrajeet Pradhan

My name is Indrajeet Pradhan and I am the Marketing Manager for QX Accounting Services – North America, and wordsmith behind the QXAS blog. Hope you enjoyed reading this piece. My job is to help accountants access the knowledge they seek through blogs, guides, and other content assets that are meaningful and actionable.

Originally published Dec 15, 2021 09:12:26, updated Dec 15 2021

Topics: Industry, Outsourcing, Tax


Don't forget to share this post!

Related Topics

Outsourced Bookkeeping Services: 5 Reasons Why Top CPA Firms Opt For it

Outsourced Bookkeeping Services: 5 Reaso...

11 Aug 2022

As an accounting firm owner, it isn’t unusual for your day to go in several different directions. ...

Read More
How much do Outsourced Audit support services cost?

How Much Do Outsourced Audit Support Ser...

08 Aug 2022

Outsourcing is undoubtedly one of the easiest ways for CPA firms to scale quickly and enhance their ...

Read More
9 Factors CPA Firms Should Consider Before Taking Outsourced Audit Support Services

Outsourced Audit Support Services For CP...

05 Aug 2022

Whether you are looking to delegate labor-intensive workload, trying to solve staffing woes, or want...

Read More
Advantages & Disadvantages of Audit Support Services

Advantages and Disadvantages of Outsourc...

04 Aug 2022

Accounting firm owners often mull over the idea of outsourcing one or more of their accounting tasks...

Read More

Subscribe to our blog

Get the latest posts in email

We’re committed to your privacy. QX uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.