May 31, 2021
Making your accountant (and yourself) happy at tax time

Staying organized makes for an easier, more streamlined tax-filing season for all.

Clients who organize tax-documents before they present them to their accountants greatly streamline the process, speeding up any refund that might be coming. (They also immediately go to their accountant's A-plus list of clients.)

Throwing all receipts into an under-bed shoe box merely causes a last-minute panic when it's time to sort through that jumble of paperwork and submit them with a return to the IRS, after all.

It's an easier process on both accountants and accounting clients when documentation is complete and in order before the tax-preparation process begins. I have one client who even types out a summary for me of her tax-year situation, as a refresher of our meeting from earlier in the year, which is incredibly helpful. These summaries are a great place to update your accountant on changes from the year before, such as divorce, if you've come into ownership of a rental property, or earned child-care credits.

Totaled in Excel or a similar program, and categorized by income and deductions and credits, is the best way to present receipts to your accountant.

Many clients like using the same accountant each year, a professional who keeps their tax return, bank account and routing number from the year before, ensuring their refund gets deposited directly into their account. This streamlines the tax-filing process even more.

The best guide for this year's tax-document gathering process? Last year's return. Some information, like depreciation, will be needed on this year's return, after all.

Create tax-filing central

Choose a location to store tax receipts where they are easily accessible - whether that is in a kitchen pantry, office file cabinet - anywhere you have regular access and will use consistently.

Documents also must be stored by category. If you have more than one business, they will need to be separated by company. Folders, paper clips or boxes can be used to separate items. The key is to immediately put all items there right away, not letting them get lost in the process. Even if you need to scan documents, store them there temporarily, just to be safe.

Be prepared

With all year to prepare, keep in mind that that IRS could request supporting documentation for certain tax documents you submit. Have copies ready to submit in advance, so you aren't rushing around at the last minute. You should also keep a record of how you arrived at your estimated amounts, showing your process, or allocations between different categories.

Lastly, our firm, like other accounting firms, probably processes tax returns in the order they were received. Confirm your accountant's system, and ensure they have the correct contact information to reach you when it's time to pick up your completed tax return. And remember, the earlier your documentation is submitted, the earlier they can get started!

Kari Kerby

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