In the first part of this series, we introduced the number of ways to begin easing your clients into using IRS resources come the tax season. Now, let’s go deeper into the process. Here’s part two of how to prepare your client for using IRS resources!
Follow a Strict IRS Checklist
The Internal Revenue Service’s Tax Preparation Checklist, according to IRS.gov Publication 5349, claims that year-round tax preparation is for everyone. It presents a straightforward and visually appealing collection of tax planning tips for people for different tax brackets to easily understand.
Publication 5349 emphasizes the need to keep proper tax records. Through effective record-keeping strategies. For this reason, Publication 5349 enumerates a list of relevant documents, such as year-end W-2s from employers, 1099s from banks, other income statements and records, and virtual currency transaction data for you to take note of
Reviewing publication 5349 can help you create your own list of papers to request from consumers. Customers should start organizing their documents as soon as possible before calling you for tax preparation and planning services.
Thankfully, a tax preparation checklist can be found in IRS Publication 5349 as a quick reference guide for preparing a tax return. Remind clients to bring these items with them when they come in for their tax preparation appointment.
Provide a Compliance Kit
Using IRS Publication 5349, you can create your own tax preparation checklist. You may choose to develop many checklists to meet the needs of various clients. There are checklists for individual taxes, corporate clients, and charities or nonprofit organizations, among others.
Your checklist does not have to be as long as the one in Publication 5349. That is only a high-level overview of the most prevalent requirements. Individual taxpayers should keep the following goods on hand:
- The prior year’s tax return
- All family members’ SSNs and birth dates
- Identity with a photograph (driver’s licenses, passports, and military identification)
- Schedule K-1 of Partnership Income on Form 1065
- Bank and financial records
- W-2 forms were provided by their employers.
- 1099-K 1098 IRS Forms for Child Care (Mortgage Interest Statement)
- Additional details on property taxes
- Expensive receipts (medical, childcare, etc.)
- Receipts (if applicable)
For business taxpayers, remember to include the following:
- Return for the fiscal year preceding
- Employee Identification Number (EIN)
- Partnerships in P&L (if applicable)
- Data on ownership shifts (if applicable)
- Bank and financial records
- Receipts (if applicable)
- Acceptances of capital assets
When producing a tax compliance package for your clients, include reference materials to new tax year developments. This year, you’ll have to explain the American Rescue Plan Act and the Consolidated Appropriations Act.
Discuss Major Life Occurrences
Each customer is unique, and you should treat them as such. This requires being aware of major life events that have occurred or are currently taking place.
Life events might have an impact on tax returns, according to the “Managing Your Taxes After a Life Event” page. Thus, comprehending your client’s experience and applying it to their tax returns is simply good service. Although delicate in nature, you can also talk to your clients regarding this matter. The following are examples of taxable life events:
- Marriage
- Divorce/separation
- Becoming a parent
- Changing careers
- Employment loss
- Bankruptcy\s
- Natural Disaster
- Serious health concerns
- First-time homebuyers who are relocating
- A family member has died.
Conclusion
In today’s modern age of digital technology, tax experts can now employ a professional tax preparation software to make things easier. This means that you can educate and work with any client seamlessly when it comes to taxes, policies, and using IRS resources. So, there’s no need to worry! You can be ready and seasoned just in time to prepare your client for the next tax season.
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