Our 2022 year is coming to a close rather quickly, and tax season is approaching. No one seems to enjoy doing their taxes, but it's incredibly stressful for taxpayers when they're not confident in their ability to file correctly. As a tax professional, it’s your job to help clients feel more at ease about filing. With some knowledge and careful preparation, you can help them breeze through the process and get the most out of their refund. Plus, they'll be glad they have you by their side!
Gather Required Documents and Forms
Nothing is more helpful than having a client come to you with their most current personal information, updates, and all documents needed to get the ball rolling. However, for those who are new to filing with a tax professional like yourself, share this short list of documents you’ll need to begin filing their taxes:
- Formal identification such as Social Security Number and Driver’s License
- A Copy of the Most Recent Tax Return
- Wage Statements
- Additional Income Statements
- Real Estate/Property Documents
- Proof of Expenses
A more comprehensive list of documents can be found on the IRS website to help your clients understand the required forms.
Identify All Income - Including Gig Work
The income you received in the year 2022 includes more than what you’ve received from your employer(s). To ensure your client is providing their total income, ask them to list any side/gig work or freelance/contract work they received income from.
Proof of Expenses
Getting the most out of your deductions and credits may require providing documentation that substantiates potential expenses. To avoid missing opportunities, it is recommended to bring in an extensive collection of paperwork such as receipts, invoices, medical bills, or charitable contributions when consulting a tax professional; even if you feel the information is irrelevant. IRA records and job-hunting costs can also be included along with mileage logs for business trips plus education and self-employment expenditures – better too much than not enough!
Ask About Tax Credits and Deductions You’re Eligible For
If your clients have a growing family or have paid out-of-pocket expenses for dental or medical, there may be credits they are eligible for. Credits like the Child and Dependent Care Credit, Earned Income Tax Credit, and the Student Loan Interest deduction may apply to them and increase their refund. Keep them aware of any credits or deductions they could benefit from reporting on their upcoming tax return.
Make Sure You Withheld Enough Tax
If your clients have had any changes to their job status during the year, it’s best to remind them to check on their withholding tax amounts. If too little has been taken out of their earned income, it could result in penalties or owed taxes to the IRS.
Set Up Direct Deposit for a Refund
An age-old question from clients has always been, “when will I expect my refund?” In recent years, the IRS has opened up the opportunity for taxpayers to receive their refunds via electronic, direct deposit. While some prefer to receive their funds via U.S. mail, those who wish to obtain them quicker can provide their bank information for direct deposit to go into effect.
Use these six tips to ease some of the tension with tax seasons so you can help your clients file confidently in 2023. Stay positive and reinforce that you're here to help every step of the way. Open productive dialogue about what needs to be done and ensure you understand their specific situation before moving forward. With careful planning and execution, filing taxes doesn't have to be such a stressful experience for everyone involved.
