Whether tax season is right around the corner, or looming ever-present in the coming months, it’s often a chaotic, frantic time of year for CPAs that no amount of planning can properly prepare them for.
While outsourcing tax preparation can ease the burden considerably for busy CPAs, for those who haven’t yet discovered the convenience and cost-effectiveness of outsourcing (particularly to countries like India), or who don’t wish to use it for whatever reason, there are plenty of mistakes for harried CPAs to make when filing their clients tax returns.
Below are 6 common tax season errors CPAs should avoid making:
- Numerical mistakes
While tax software, outsourcing and automation can be of great use during tax season, it’s still important that CPAs check their tax prep or filing work thoroughly, to prevent mistakes from creeping in.
- Entering the wrong client details
Tax season is notoriously busy for CPAs, and when rushing to keep up with demand, it’s not uncommon for mistakes to be made when entering clients’ details, such as their tax ID, Social Security number and so on.
- Failing to record all income or file on time
Penalties can easily be incurred when a clients’ income is underreported, and when tax returns aren’t filed in a timely manner.
- Being unaware of tax rules or deductions
It’s absolutely imperative that CPAs keep themselves updated with all changes to tax laws or tax reforms, otherwise they will inevitably make mistakes during tax season.
- Not seeking help
Busy CPA firms may be reluctant to outsource some of their tax preparation duties for any number of reasons, but in refusing to seek help, they risk letting their clients down, particularly during busy times of the year such as tax season.
Outsourcing can actually save CPAs money in the long term, by enabling them to pursue other services of higher value while the routine tax duties are taken care of by a capable team of experienced accounting and bookkeeping professionals.
- Failing to gather client information in time
Few CPAs are fortunate enough to have clients who share their financial and income statements with them without the need for prompting. But if CPAs don’t take proactive action to remind their clients of what information they require from them well in advance of tax season, delays are likely to occur.
Even if a CPA firm uses corporate tax outsourcing, it may still fall under the realm of their responsibility to send out timely client reminders.
Sometimes, even the most experienced of CPAs can find themselves struggling to cope with the sheer size of their workload during tax season, and while this may be a strong indication that business is going well for them and that they have plenty of clients, they must still take steps to ensure that all work is handled promptly, accurately, and efficiently. If they don’t, they could find their client list shrinking as dissatisfaction sets in and disgruntled clients look elsewhere for a CPA to meet their needs.
