The upcoming Tax Day is on 15th April 2020, and people can start filing their returns from January 2020.
As tax season 2020 is right around the corner, CPAs, accountants, and tax preparers have a lot on their tables. Tax season is the most stressful stretch of the year for taxpayers. Hence, to avoid last-minute frustration, one must deal with it systematically.
Tax Cuts and Jobs Act (TCJA) had a significant impact on the tax filing process during tax season 2019, and many individuals are still unaware or confused about these changes. It is essential for tax preparers to keep updates of these changes and plan the filing process accordingly.
Aside from these changes, some of the problems faced by taxpayers include:
- Failure to file returns on time
- Undetected income reports
- Calculation errors
Here are some tips which would help tax preparers avoid these issues and attain success in tax season 2020:
1. Start Filing Early
Around 20% of taxpayers fail to file taxes on time due to which they have to face penalties by the IRS. It is best to start early and file the taxes on time to avoid the last-minute hassle.
Early filing ensures quicker tax refunds, and one doesn’t have to wait until the end of April for the same. Procrastinating the filing process increases the chances of tax fraud and errors in returns.
2. Get Organized
Start the tax preparation by planning a schedule for the tasks and gathering the required information for the process. Categorizing tasks, according to their priorities, would save a lot of time and avoid any mismanagement during the busy season.
Taxpayers need to assemble some necessary information and documents before filing the returns, which includes:
- Personal details of the client
- Tax-related receipts
- Bank statements
- Details of the income sources
- List of the charitable contributions
An organized filing process improves the efficiency of any business for a smoother tax season.
3. Stay Informed
With constant changes being made in the tax laws and regulations, it is crucial to stay updated and be aware of the tax reforms. For instance, the Tax Cuts And Jobs Act (TCJA) increased the threshold for the medical expense deductions from earlier 7.5% to 10% in 2019.
Tax preparers must take time to go through all the tax changes to avoid incorrect form filing. Inaccurate filing may lead to a delay in tax refunds and even penalties.
4. Hire an Expert
CPA or a tax professional can help businesses deal with the tax challenges as they know the accounting and tax industry inside out. Many companies try to avoid hiring professionals in order to reduce expenses, but these experts might save the firm more than the investment.
Recommended Reading: Best Places To Find CPAs and Accountants For Your Business
Outsourcing is also a good option, which further saves the cost of hiring. A knowledgeable tax professional makes the filing process seamless and more accurate.
5. Use Technology
Technology has become an indispensable part of the taxation and accounting process. There are various tax and accounting software solutions in the market, which have helped to reduce tax-season stress for professionals by automating most of the manual processes and increasing accuracy.
Other modern-day technologies like Cloud Computing further streamline the tax process by providing added advantages of remote access, multi-user collaboration, scalability options, and more.
Further, hosting the tax software on the cloud enhances its capability. Cloud service providers ensure advanced security of data, seamless third-party integration, and regular backups. It makes the filing process more relaxed and productive.
6. Check for Tax Deductions
Claiming tax deductions reduces the amount of tax owed to the IRS. Many taxpayers are eligible for some amount of tax deductions depending upon their tax bracket. Investing money in items like furniture and IT equipment for the office can increase the deductions. Cost of healthcare, retirement contribution, college tuitions also offset the amount of taxes to be paid.
It is essential to keep track of all the expenses and bills which will be used for reference purposes during the tax filing process.
7. Maintain Healthy Environment
Businesses must set up the right office environment during the tax season to improve employee input and proficiency. For better management of the team and the workflow, entrust some of the tasks to the sub-ordinates according to their willingness and expertise.
Sharing the work proves to be a great helping hand during the busy season. In order to handle a large client base, it is better to categorize them according to the common requirements. It further helps to accomplish the task effectively.
8. Beware of Frauds
Tax scams are on the rise during the tax season. Accountants and tax professionals need to prepare for security threats like malware attacks, form frauds, identity attacks, etc.
One must stay vigilant to protect personal information and data from fraudsters. Important points to keep in mind in order to stay safe this tax season are:
- Watch out for spam emails
- Use anti-virus software
- Set up strong passwords for business accounts
- Choose a reliable cloud service provider
Following these steps increases the safety of sensitive data, which further ensures a stress-free tax season.
9. Create an IRS Account
Setting up an account on the IRS website provides users a secure platform with necessary information on filing the tax returns. Taxpayers get 24/7 support and information for tax preparation.
Moreover, one can access his/her tax records, payment history, and set up an online payment agreement. The IRS protects the identity of the user through the two-factor authentication process, which further protects sensitive data.
10. Take Health Into Consideration
Staying in shape should top the list for tax professionals this tax season. One cannot work to its full capacity if he/she is not well.
Try to implement some of the healthy habits into the lifestyle, especially during the busy season, such as:
- Drink plenty of water
- Don’t skip a meal
- Eat a healthy and balanced diet
- Exercise regularly
Taking care of mental and physical health is essential in order to give personal best during the busy season.
Tax season might be a stressful time for many professionals, but businesses can achieve success by managing their tasks effectively. The above tips will ensure better filing experience for tax season 2020 and will provide a seamless tax filing experience.
Do you have any more tips for a successful tax season 2020? Please write to us in the comments section.
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