Tax Season 2021 is around the corner, and it is when most people start wrapping up their documents to be compliant with the taxes. Also, this is when people reach out to the tax professionals for help with tax filing. With several clients turning up to the tax professionals, it becomes challenging for them to keep up with their needs and the deadlines. Thus, it is advisable to prepare a plan and gather all the required information beforehand for a smoother tax season.
To help tax professionals be ready and prepared for the upcoming busy season, we have curated a checklist of points to consider for tax season 2021.
1) Start Early
Starting early always works in favor of the tax professionals as no preparation is enough for tax season. Most importantly, the pandemic has led to many changes in the tax industry this year. There have been new tax laws and deductions that cannot be neglected while filing returns. So, start as early as possible to avoid last-minute confusion and make the most of the busy season.
2) Collect Documents
Start asking your clients to send their medical expense receipts, 1099 forms, donation receipts, canceled checks, and all other necessary documents required for filing the tax returns. It will provide you ample time to organize the documents and result in faster & timely tax return filing.
3) Invest in Technology
Technologies like cloud computing, hosted VDI, big data, and artificial intelligence can make tax filing processes smooth and hassle-free. Tax professionals can start their journey towards technological advancements by investing in tax software hosting services. Hosting tax software on the cloud ensures flexibility, remote accessibility, security, add-ons integration, and much more.
4) Delegate Tasks
Are you among those who try to manage all tasks by themselves? If yes, you must stop trying to take on all the tasks alone as it will only increase the stress leading to unwanted errors while filing tax returns. Instead, plan and delegate tasks among the team members based on deadlines, priority, and criticality. Doing so will ensure a smooth and stress-free tax season.
5) Home Office Tax Deduction
Since most small business owners and entrepreneurs are working from home as per the ‘New Normal,’ the IRS has decided to loosen the eligibility rules for claiming home office deductions, allowing more people to save on taxes. So, gather all the updated norms to keep yourself updated on home office tax deduction to save your clients’ money.
6) Coronavirus & Taxes
This year, the government issued multiple loans and relief funds to allow businesses to operate during the pandemic. A significant part of these aid funds is non-taxable. Thus, ask for the stimulus checks, PPP loans, unemployment benefits, and education expenses taken by your clients before calculating the taxable amount.
7) Focus On Cybersecurity
Every tax season, there is some news about tax frauds. But with the work-from-home situation, cybercrimes are also seeing a surge. Thus, tax preparers should practice safety measures like firewalls, strong passwords, and storing data on the cloud. For a safer tax season, you can also invest in Security-as-a-Service technology to keep scammers at bay.
8) Categorize Clients
During the tax season, tax professionals often see a surge in the number of clients. Such a large clientele can become challenging to handle during the busy season when deadlines approach from left, right, and center. To manage such situations, put clients with common tax filing requirements together to ease the process and save time.
9) Concentrate On Health
Health is super important. But tax professionals often dwell so much in work during the tax season that their health takes a backseat. Extended work hours and endless client requirements can cause stress, which can hamper your productivity. Thus, try to take short breaks, eat nutritious meals, and do some simple desk exercises to maintain your health.
Tax season can be a stressful time for tax professionals, but it can be turned into a success with the above tips. The right planning and proper schedule will help you remain calm and productive throughout the busy season.
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