Every tax accountant has 1040 clients. And, while many firms are focused on proactive advisory services that go along with business clients, the people that own those businesses file 1040s.
And, as the “Great Resignation” continues, there has been an upward trend in people leaving their jobs to start businesses of their own. According to this report by CBS News, through September, Americans have filed a record 1.4 million applications to start new businesses.
Tax season 2022 is merely weeks away. And it is projected to be another challenging season given complexities of recent legislative changes including the Advanced Child Tax Credit, the third stimulus payment, etc.
So, what DO your clients want?
Are you booking proactive planning and projection meetings with all of your new business owners right now? If not, you are missing an opportunity to consult with those who need your help. Lots of people started businesses this year, and if you aren’t helping them, someone else will.
A return that is right.
I can’t emphasize this enough. I am not a taxpayer who still has recurring nightmares (annually at tax time:) from a bad tax experience almost 20 years ago. After working with a tax accountant for 3 or so years for business and personal taxes, we changed firms for an accountant who seemed to be more interested in helping us move a family business forward at the time. This new accountant found a large error. Very large. And, to make things worse, it was repeated over the 3 years we used the prior firm, culminating in a major – and extremely unplanned and devastating- tax liability.
I am not alone. According to the IRS, there were 1,176,499 mathematical errors on individual income tax returns for the 2020 FY, resulting in 1,010,461 notices.
At TaxExact™, we do proof of concept for tax firms regularly. Some accountants want to see how the tool works to either validate the return results or uncover errors. Most recently, we worked with a firm whose client owed under $1,000 this year. When we conducted the proof of concept for them, we discovered that not only should the client have received almost $7,000 back – this individual would also be receiving a notice for an error. What an opportunity for the firm to get ahead of a tax situation that would almost certainly result in the loss of a good client.
We work with firms daily who tell stories of clients that have come to them from prior firms where significant errors were made.
There is nothing more important, when it comes to your tax return, than simply being right.
No one likes surprises at tax time. For clients who have more complex or business returns, a planning meeting now to help manage expectations next year is a great idea. As obvious as this typically is for firms, don’t forget about new clients or clients who started new businesses this year.
Peace of mind is everything. As a taxpayer who doesn’t want surprises and wants to rest assured that my return is right, I can’t imagine working with a tax accountant who doesn’t use TaxExact™ to provide that peace of mind.