In my last column, I discussed the importance of caution when selecting a tax return preparer — whether that’s you, a volunteer, a paid professional, or an “unenrolled paid preparer” — that is, someone who is not a CPA, attorney, or enrolled agent.
Because of extremely strict tax deadlines and professional considerations, your tax preparer offers unique services under constraints not found elsewhere in the marketplace — and he or she will likely have to work a lot of overtime to make sure your returns are done correctly. (I’m a CPA myself, and I put in 50 or more hours each week during tax seasons.)
There are a lot of things your tax preparer would like you to know about in preparation for doing your tax returns:
Realize that your tax preparer can’t assume you’re always right.
Although many other professions operate under a “the customer is always right” ethos, our responsibility to our clients is to legally minimize our clients’ tax liabilities, while simultaneously protecting them from scrutiny by the Internal Revenue Service (IRS) and state and local tax authorities. We have to follow strict professional rules about what we can and can’t do for our clients, on pain of severe penalties.
For example, if you have reportable income, we can’t leave it out of your returns, and if you have nondeductible expenses, we can’t claim them as deductions or credits.
We will have to ask you to provide us with appropriate documentation for anything you’re trying to claim or omit. That means that if you earned income, you’ll need to show us a Form W-2, 1099, K-1, or other business documentation that proves that you earned the income and it is taxable (or not).
If you want to claim a deduction or credit, you’ll need to show us appropriate documentation for that deduction or credit, like a receipt from a charity acknowledging a donation over $250 that meets IRS specifications for a charitable contribution.
And we can’t promise you refunds when your aggregated tax records show that you aren’t entitled to them. If you owe tax, it’s up to you to pay it on time with your returns or extensions.
Be prepared when you meet with us.
Your tax preparer needs all the records necessary to report your financial transactions on your returns. If you sold assets such as stocks, bonds or real estate last year, we need all your 1099s and closing statements to establish not only the selling dates and prices, but also the acquisition dates and prices of the assets. If you have itemized or business deductions, such as medical expenses or job-related expenses, we need all of them in order to complete the appropriate forms.
The more complete your records are, the more efficiently we can prepare your returns — and the returns of all our other clients. We realize you may not have all the information at once, but please don’t deliver it in trickles — or at least, warn us that you don’t have it all when you bring it to us. It’s not efficient for us to have to take apart your return, insert new information, and put it back together again if we’ve already prepared it for you.
Be respectful of our time.
Because we have to serve a large number of clients within a finite period of time, we’d appreciate it if you realize that we need to be efficient.
We have to limit the amount of time we can spend with you that doesn’t involve tax preparation. So we may cut you short if you try to engage us too long in small talk or are looking for non-tax-related assistance, such as investment or loan advice. Please save this for after tax season if possible — especially as the filing deadlines approach.
Please don’t be “that client” — the one who drags containers of receipts to our offices that have not been previously organized and totaled. Take the time to organize and total your documents before you bring them to us. If we have to spend extra time doing it, it’s time that we can’t use more effectively on your behalf — or on behalf of other clients.
And please don’t wait until the last minute to bring your information to us, even if you don’t have all your information. Plan ahead by bringing us whatever you can, as soon as you can, and let us know what you’re waiting on. If you need your returns in a hurry, bring your information to us earlier so we’ll have a reasonable amount of time to prepare your returns.
We tax preparers will appreciate your courtesy as we do our best to hold off Mr. Tax Man for you.