THE TAX RETURN PREPARATION PROCESS
Many of my clients are working with a CPA for the first time and often want to know what the process is for getting their return completed. Here’s what you should expect in ten easy steps if you join our list of clients.
FIRST WE MEET
Meet and make sure there is a good fit. This doesn’t mean we have to be BFFs but it does mean that we can communicate well and that your tax issues aren’t outside our areas of expertise. An example of a tax area that would not be a good fit is manufacturing. Tax accounting for manufacturing has its own set of special quirks so we don’t accept these types of clients. We have our own specialities – for instance pass-through entities (LLCs, S Corporations, Trusts), real estate (rental and development), and compensation planning for high net worth individuals and individuals with income from stock-based compensation (RSUs, NQSOs, ISOs) to name just a few. We will let you know if we don’t think your particular tax situation falls within our areas of expertise.
SECOND, YOU’LL RECEIVE AN ENGAGEMENT LETTER TO SIGN AND RETURN
As part of our initial meeting you should have provided a copy of your prior year tax return(s). We use this tax return to create a tax organizer that we will send to you in early January. Included with the organizer will be an engagement letter that outlines our responsibilities and lists the fee for preparing your tax return. Please sign and return this letter in the enclosed envelope as soon as you receive it – returning this letter guarantees you a slot on our work schedule.
THIRD, YOU COLLECT YOUR DATA
The tax organizer contains a list of questions about your tax situation as well as a summary of your prior year’s tax data. We ask that you complete the list of yes-no questions in your organizer. Then you can choose to fill out the organizer using your current year data or use the organizer as a guide as to what current year data we need. We will need the originals or copies of all Forms W-2, 1099, 1098, etc. that you receive in order to report items correctly – that will help us to avoid IRS matching notices being generated for your return. If you have a method for collecting and summarizing your data, that’s great, you don’t have to use the organizer summary but please make sure we get all of the data.
FOURTH, YOU SEND THE DATA TO US
You have three choices here.
You may mail your tax return data to us. Always use the following address:
Marci Flanery, CPA
PO Box 548
Lopez Island, WA 98261
Second, you may scan and send your information to us using LeapFILE. If you send us the bulk of your data with only a few items missing, LeapFILE is a great way to get the last few pieces of information to us. LeapFILE is very similar to using email. LeapFILE encrypts your data making it safer to transmit over the internet and if you use the Flanery CPA link (below) there is no charge to you for this service.
May we request a small favor here? Please don’t send your data to us one piece at a time – collect most of it and send it in one, or a few, small batches. At the peak of the filing season, we have a lot of data to track and getting 10, 20 or 30 separate emails each with one piece of information makes it more difficult to ensure that your information gets to the correct file during a very busy time. LeapFILE will let you attach multiple documents in a single transmission. On the other hand, if it’s the last piece of information outstanding on your return, then please do send the single item via LeapFILE – we want the data to finish your return.
IN PERSON BY APPOINTMENT
Third, you may schedule an appointment and bring your data to the meeting as some people like to go over their information with us prior to preparation. This option also makes sense if you’ve have a lot of complex transactions or big changes in your situation during the year. If you prefer this option – BOOK YOUR APPOINTMENT NOW. We only have a limited number of appointments during busy season (we need time to actually prepare the returns) and the appointments usually fill up by mid-February. The last available appointment is in early March. To make an appointment, click on the following link:
FIFTH, WE PREPARE THE RETURN
When your return information arrives at our office we will put it in a queue and then prepare it based on a first-in-first-out basis (first come, first served for non accountants). In early February there is about a 1 week backlog and by early March there is a 3-4 week backlog. All CPAs have backlogs during busy season. If we receive your completed information by March 10th, we will have the return prepared and to you by April 10th. If we receive your information after March 10th, we may or may not have the return completed by April 10th and we reserve the right to file an extension of time to complete the return past April 15th.
SIXTH, YOU REVIEW A DRAFT OF YOUR RETURN
Once we have prepared your tax return we will send you a draft for your review, usually via LeapFILE unless you have specifically requested other arrangements. At this point you should review the return as soon as possible and ask any questions. Once you’ve had a chance to review the draft and we make any necessary changes, I will send a final return via the mail (see next step). If you sent your data by LeapFILE, then you have the originals of your documents to help with your review. If you mail your information to us, please make and keep copies for yourself so you can refer to them. Another LeapFILE is a nice solution for getting any additional information to us. Often clients don’t have any questions or changes – once in a while we go back and forth a few times at this point with additional draft returns if we have make changes. After you approve the draft (please send us an email telling us this – don’t leave a voicemail), we go to the next step.
SEVENTH, WE SEND YOU FINAL FILING DOCUMENTS
Once you have approved the tax return draft we will send you a PDF of your efile authorization, any payment vouchers, and your completed tax return. We will also send you a hard copy of these documents in the mail along with any original documents. Keep the PDF of your tax return in a safe place on your computer so you will have it when you need it (mortgage loan applications, student loan documentation, etc.).
EIGHTH, YOU SIGN AND SEND BACK YOUR EFILE AUTHORIZATION AND MAIL CHECKS TO THE GOVT
Sign your e-file authorization voucher and mail back to me as soon as possible. We cannot file your return without the signed voucher. The only item you will normally send to the IRS would be a payment voucher along with a check (assuming you owe money with your return).
NINTH, WE EFILE THE RETURN
When we receive your signed e-file authorization we will electronically file your tax return. If we are filing an individual tax return (a Form 1040) for you, the first-named person on the return will receive a confirmation that the return has been filed and accepted by the IRS from our software provider.
TENTH, WE’LL SEND YOU BILL
After your return is filed we will send you an invoice via email. It should be for the fixed fee amount listed in your engagement letter unless we have discussed and made other arrangements during the preparation process. If you want to pay by check, print out the invoice and return it with the check. If you want to pay by credit card, click on the link in the invoice email and it will take you to the website for credit card processing. There is a “pay” button at the top of the invoice that you can use to make credit card payments.
And then you are done. Remember to email, call, or make an appointment throughout the year to discuss any developments in your tax situation or questions you may have.