Even for tax professionals, when clients ask them to file their income tax returns, they know that the process might be longwinded and complicated, and they might not altogether look forward to doing it. But, as it’s their job, do it they must, and the right strategy can help them manage the task more efficiently.
Or, they can of course utilise tax preparation outsourcing, and have them shoulder the burden instead.
Whether you file 1040 individual tax returns on your clients behalf yourself as an accounting professional, or hire an outsourced service provider to do it for you, this 10-step process can help you get the job done with ease:
Step One: Document collation
Without the necessary documents, no taxes are going to get filed, and to make sure you gather the right documents, it’s important to have a complete understanding of the tax situation of your client.
From W-2s and 1099s, to donation receipts, mortgage interest statements and other records of deductible expenses, having all of the proper documentation at your disposal, is key to a smoother tax filing process.
Step Two: Document organization
Once you have all of the necessary documents from your client, you must start categorizing, verifying, and reviewing them all to check for accuracy. Should any information be missing or conflicting at this stage, it must be flagged immediately, and follow-ups carried out in a timely manner to fill in any gaps.
Step Three: Data entry
Tax returns with inaccurately entered data will always fall at the first hurdle. Any mistakes made when entering data on behalf of a client, can have disastrous consequences, including potential audits and inaccurate tax outcomes.
Step Four: Calculating taxes
To calculate a clients taxes accurately and get the very best results, accountants and CPAs must analyze any number of different filing scenarios, like those who are married filing, and those who are filing separately, to see which would provide them with the most favorable outcome. Deductions and credits must also have their eligibility evaluated at this stage, so that clients gain access to every benefit they may be entitled to.
Step Five: Internal review
Before any returns are shared with clients, it’s essential to carry out a meticulous internal review to help identify any mistakes, omissions, or issues with compliance. At this stage, diagnostics that are automated may be run to highlight any potential discrepancies or errors.
Step Six: Client review
Once the internal checks have been carried out and the return has passed with flying colors, the client must then be talked through it so that they understand every aspect of it in full. It’s important to avoid the use of industry jargon when doing so, and explain everything in terms that the client can understand. You may also use this opportunity to talk with your client about tax planning and tax strategies for the upcoming years.
Step Seven: Finalizing and signing
Once the client has approved the return and given the go-ahead for filing, signatures must be collected and payment or refund details need to be confirmed.
Step eight: E-filing submission
Once the return has been signed by the client, it can be e-filed to the IRS and relevant state authorities. When this is done, you can share the receipt you’ve obtained with the client.
Step Nine: Support and insights
Clients should then be provided with a full copy of their return, along with appropriate support should a notice or audit requirement have been served. Data analysis should also be carried out to offer insights into future tax planning strategies.
Step Ten: Client feedback
Lastly, whether you’re a client of corporate tax outsourcing, or a tax professional providing services for individuals, client feedback is crucial. Send out a survey to find out how well you did, or where you could improve.
Roll out efficient 1040 individual tax returns like the pro that you are, with this tried and tested 10-step workflow.
