Tax Return Filing
It’s now officially tax return-filing season, which means businesses and individuals of all shapes, sizes, and incomes will be sending their returns off to the IRS. While tax season is full of many mini-deadlines, there’s no doubt that April 15 is the big one. Many people send off their returns with little more than a hope that all is correct, but you shouldn’t be one of them. Diligently engaging in best practices before you file is the best way to avoid stress or anxiety after the face. To achieve peace of mind and confidence in your tax filing, follow these simple do’s and don’ts.
Do: Check Your Work
In the math classes of our youth, teachers encouraged us to check our math to make sure our solutions were correct. While the IRS doesn’t ask you to “show your work,” it definitely expects you to be correct with your numbers. It’s crucial that you verify all information before filing. We know that the moment you complete your return feels like a victory, but it isn’t really the end. Until you send it, your primary goal needs to be ensuring the utmost veracity. CPAs, too, can’t rely on their clients to verify data. The client may be the one on the hook with the feds if something is amiss, but every CPA should take the onus to guarantee an accurate return.
Tax season produces enough pressure on its own; don’t compound it by waiting until the last minute. If you feel as though you’re going to be up against the proverbial gone to get your return completed, you can always ask for an extension. Remember, there’s no going back after the moment you file. If you do end up needing an extension, you should still do everything you can to complete your taxes as early as possible. After all, an extended deadline isn’t worth much if you only use it to procrastinate all over again. Ideally, you’ll have your return sent without needing to look up at the calendar or clock in a panic.
Do: Explore your options
There are more ways to file than ever before, and certain services are preferable depending on your income level and the complexity of your taxes. Some filing software is free for certain income levels, while other solutions are more equipped to handle multiple sources of income, lots of deductions, etc. CPAs have even more services to choose from, with everything from client-facing portals to project management systems offering to lessen the burden of busy season. Going digital can have huge advantages for accounting professionals, allowing them to cut down on time to contact clients and eliminate spending on paper and postage. No matter the best route for you, it’s important to explore your filing options.
Don’t: Rely on Past Information
Your income, expenses, and deductions could be exactly the same as last year, but your refund may end up ending a little different. That’s because we’re stealing dealing with the ramifications of the Tax Cuts and Jobs Act of 2017 and the corollary state tax laws created in response to it. This year isn’t expected to be as surprising as 2019 was, but you can expect a few small changes here and there. As such, you shouldn’t use last year’s return as a be-all, end-all metric for success. You can use it as a resource, but don’t be beholden to it. In reality, every year’s return is a unique creature, and it should be treated as such.
Do: Reflect on your return
Did your filing season go as well as planned? What could you do next year to make it a little smoother? You should ask these kinds of questions after you’ve filed, rather than waiting to address them come tax season 2021. The earlier you put in place a better system, the more rewards you’ll reap when the tax calendar rolls around again. Identify areas that cause you hang-ups and develop a plan to overcome them next time around. As the old saying goes, if you don’t learn from your mistakes, you’re doomed to repeat them.
For CPAs and small business owners, one of the easiest ways to untangle tax-time financials is to use a robust accounting software that will give you the data you need to file with confidence and accuracy. AccountingSuite provides all that and more to businesses and CPA firms looking to grow. Head here to find out how we can make tax season, and the entire year for that matter, less stressful.