5 Ways for CPAs and Their Clients to Prepare for Tax Season

The 2022 tax season is upon us.

The 2022 tax season is upon us. This time of year can either be a boon or a boondoggle to individual taxpayers, depending on their situation. But being as prepared as possible is an advantage for all involved.

In anticipation of bottlenecks and delays caused primarily by the continued effects of the COVID-19 pandemic, the IRS actually opened up the filing window on January 24, several weeks earlier than normal this year. Many Americans appear to be taking advantage of the early opportunity as the IRS reported that nearly 16.7 million had filed their returns as of February 4, with nearly 13.7 million of those having already been processed.

The filing deadline this year is April 18. The IRS expects more than 160 million Americans to file their taxes this year and encourages filing accurate electronic returns for the fastest possible refunds. 

The expanded filing period notwithstanding, tax season still tends to add a lot of stress and anxiety to everyone it touches—from the individual filer to frazzled CPAs everywhere. No one, it seems, is off the hook until that return and proverbial check (whether for payment or refund) is in the mail. 

But it doesn’t have to be that way—or at least, maybe the effects can be minimized to a certain degree with a little advance preparation. Here are five ways for CPAs and their clients to prepare for tax season:

Prime the Pump

“Procrastinate now, don’t put it off,” is a pithy quote attributed to comedian and talk show host Ellen DeGeneres. But procrastination is one of the biggest contributors to stress for everyone involved once the calendar turns to April 1 every year. (No fooling!)

Wouldn’t it be nice for all involved if everyone proactively worked ahead of the deadline to file taxes in a nice, steady flow? That may be too much to ask, but there might be a few things you can do to prime the pump, so to speak.

Whatever way you typically get messages out to your clients, send up a flare letting them know all the pertinent dates, special considerations for this year’s filings, and what your office hours and schedule leading up to the deadline will be. Encourage them to get all their paperwork in order and to start making appointments before things begin getting out of hand.

Evaluate Your List of Clients

All CPAs have some problem clients. You know the ones I’m talking about: from those who are woefully, albeit apologetically, unprepared to those who will show up on April 18 expecting immediate, last-minute assistance.

Whatever the reason, it’s a good time to run through your list of clients and assess which ones could create problems in the weeks ahead. Calculate those who could benefit from a proactive prompt in terms of preparedness and those who perhaps need a more rigid approach. Some CPAs suggest informing some clients of specific new rules (which really only apply to them) or making the tough decision to cut them loose so you can focus your limited time and resources in a more productive fashion.

Warn Clients of Scams

This tax season, the IRS is once again warning taxpayers to be extra vigilant in recognizing signs of scams designed to separate them from their hard-earned income. This includes impersonation schemes that can involve text messages, emails or phone scams, and even fraudulent unemployment bids.

“With filing season underway, this is a prime period for identity thieves to hit people with realistic-looking emails and texts about their tax returns and refunds,” said IRS Commissioner Chuck Rettig in a recent statement. “Watching out for these common scams can keep people from becoming victims of identity theft and protect their sensitive personal information that can be used to file tax returns and steal refunds.”

Passing on a timely reminder to your clients about scams might save them from a costly mistake.

Separate Clients by Categories

During tax season, any steps you can take to save you and your staff some time are worth exploring. This might be especially effective for those serving a robust clientele, but one time-saver is to separate your clients into groups of similar industries.

Distinct industry groups might have common requirements, tax breaks, or strategies that are unique to them. Keeping those groups together, served by employees who know the ins and outs for those fields, is of benefit to both you and your clients.

Prepare It Forward

As you are meeting with clients to finalize this year’s taxes, it’s a great opportunity to help them start preparing for the 2023 filing season. Due to the current rising costs of inflation, the IRS has already instituted some changes for earners in 2022.

Those changes include bumping up the income thresholds for the seven different tax brackets and increasing standard deductions, a move that effectively reduces taxable income. Tax caps for contributing to IRA or 401k plans also increased, and changes also apply to capital gains taxes and Earned Income Credit qualifications. Cluing your clients into these changes and strategies which could benefit them next year would certainly be doing them a solid.

The best-laid plans, of course, will not completely eliminate the inevitable parade of procrastinators. But it could prevent that parade from turning into a complete blockade as April 18 approaches. Prime the pump, evaluate your clients, warn them of scams, categorize them, and prepare them for the future, and this tax season will go by much more smoothly.