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Advice for Tax Preparers

Making tax preparers lives easier one blog at a time

Interviews to Help Tax Preparers

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As part of my blog Advice for Tax Preparers, I will be adding interviews other tax professionals on their advice, tips, and tricks to make your life as a tax preparer easier and more successful. My intent is to get a wide range of interviews from tax professionals in terms of their experience and part of the country so that you can get an understanding of which issues are common in public accounting firm tax departments versus which issues depend on your situation or part of the country. [click to keep reading…]

Learn Why New Accounting Staff Eat Time & How to Fix The Problem

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Accountants by the nature of our profession want to follow rules. Therefore, we like it when we have guidelines such as an employee handbook that tell us how to respond in an accounting firm to a particular situation. However, new accountants soon find out that the firm grapevine provides unwritten rules to be followed as well. One example is in the area of the billable hours (the time each person charges to the job for preparing and reviewing the tax return or audit) that a staff should put on his timesheet. If the staff person talks to people in the firm they will get one or more of the following answers: [click to keep reading…]

Learn How CPA Firms Will Increase Their Net Income on 1040 Tax Returns Without Raising Fees or Reducing Expenses.

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One of the constant problems for CPA firms with individual clients is getting all of their information in time to prepare, review and file their return before the October 15th deadline no matter how many times they are asked for their information. I once worked at a firm that had an individual client that was the last tax return the firm filed by the October 15th deadline three years in a row.

When clients delay providing their personal tax information until after August 1st, the extra time and expense spent on the tax return can turn a profitable job into a loss for the firm. At a minimum, the client has forced the firm to use “tax season” time to prepare a return that could have been completed in June or July.

In a good economy, the firm might charge the client for the additional time (or use of tax season time) and effort spent on the tax return. But since the economy has been bad for several years, clients have become highly resistant to material price increases. In addition, the economy has caused many clients to see the creation of their tax return as a product rather than a service. Therefore, they simply do not see the difference in which CPA firm prepares their personal tax return. [click to keep reading…]

Tax Preparers: Learn about Four Professions that Create Problem Clients for CPA firms.

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Man Eating PC Tax accountants might work with numbers, but we are in a people business. You will run into good and bad clients in all professions. But the following professions tend to cause CPA firms more grief on average than others. If you are assigned a client in one of these area then look at the prior year files to see if the client tends to cause a problem for the firm. [click to keep reading…]

Accounting Majors: The Three Tax Books Used by CPA Firms Every Day that Colleges Do Not Give You

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College tax textbooks do provide good information. But they are rarely used in a public accounting firm’s tax department. The reason is that these books are usually designed to discuss basic tax theory rather than to discuss the day-to-day items that you will run into in a typical public accounting tax practice. Therefore, a tax textbook has the luxury of spending several chapters discussing tax reorganizations even if you might not see one for the first several years of your career (if at all).

But in the real world, you want practical tax information that is easily accessed. You want to know what specific types of medical expenses are deductible on Form 1040 Schedule A or real estate expenses on Form 1040 Schedule E. Yes, there are times when you want to research a difficult topics. But on most occasions, the issue of whether an item is deductible or includible in income has already been decided. You only need to find the answer (in plain easy to read English).

As a result, there are three tax books that have been created to solve this problem that are used daily in a public accounting firm’s tax department.  [click to keep reading…]

Learning How to Get the IRS to Waive a Nonprofit Late Filing Penalty

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It’s going to happen. At some point, you or your boss is going to get the following sob story from a client.

Dear My Favorite CPA (when its starts this way you know you are in trouble – heh),

I know that you only prepare my individual and business tax returns. But I really need your help. I am on the board of directors of a charity that just got an IRS notice which says we owe them $30,000!!!

We did not discover until recently that the prior controller did not file last year’s Form 990 tax return and the IRS wants $100 per day in penalties. The letter also says if the amount is not paid then the IRS will put a lien on our assets!!! Help!!! [click to keep reading]

Learn How to Prepare Small Nonprofit Tax Returns in Five Minutes

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Raise your hand if you do your best to avoid working on nonprofit tax returns. If your hand is up then you are in the majority. Most tax partners, managers and staff avoid them like the plague.

The 990 tax forms are very different from individual and business tax returns and ask a lot of informational questions. As a result, they can absorb a lot of the firm’s time and expense. In addition, since the entity is a charity, it is likely that they will ask for rock bottom prices or ask you do to the tax return as a charitable donation.

Ok, then why does the firm do them? [click to keep reading…]

Tax Preparers & Reviewers: PLUG = GULP Spelled Backwards

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Raise your hand if your client or boss has given you a set of financial statements where the balance sheet does not balance. If anyone has their hand down it must be that they only do individual tax returns (heh).

Everyone that prepares and reviews tax returns will run into situations when a client’s corporate financial statements simply do not balance. The client does not have an answer for it and you are stuck trying to make it work. [click to keep reading…]

Tax Preparers & Reviewers: Learn an Easy Time Management Trick for Tax Season E-Mails

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If you are like most tax preparers and reviewers then you cringe at opening Microsoft Outlook during tax season. You spent the previous evening working overtime trying to get returns off your desk because you wanted to spend today catching up on things you need to do.

But you open your inbox and you find 20, 30 or 50 e-mails from

  • clients,
  • other staff,
  • your boss,
  • IT,
  • headhunters (who want to lure you to another firm while you are frustrated), and
  • others who want to take up your time. [click to keep reading…]