You just realized that it’s already March, and you haven’t done anything with your taxes yet! Do you continue to file them on your own? Or, with all the changes that COVID brought last year, do you think it would be better to have a professional prepare your taxes? Let’s talk about outsourcing your tax preparation (but hey, if you continue to prepare your own, you GO girl!).

First, when employing the services of a trusted advisor, ask your friends who they use to prepare their taxes and if they would recommend them. The tax preparer should be a CPA (Certified Public Accountant) or EA (Enrolled Agent); both are qualified to prepare individual tax returns. Make sure to get at least two to three names. With it already being March, some tax preparers may be at capacity and cannot take any additional clients through April 15 (we’ll talk about AFTER April 15 in a minute).

Okay, so let’s assume that you have found a tax preparer who was recommended to you, on whom you have been able to do a background check, and who has time to prepare your tax return. Here are the top 5 tips in working with a preparer:

1. Complete the Tax Organizer

Many times, when working with a tax preparer, they will often provide you with what is called a tax organizer. A tax organizer is a booklet that asks tax-related check-the-box questions on the first few pages, and then asks about different sources of income and expenses throughout the rest of the document. It can be very lengthy (I haven’t seen one less than 10, but most are 25-30 pages), but often you can check with the tax preparer to make sure it’s okay if only complete the first few pages.

Bottom Line: it takes TIME to complete the organizer, and as a busy mom, that is something that you do not have a lot of. Check with your tax preparer to find out what portions of the tax organizer must be completed and the deadline for completion.

2. Bring the Shoebox of Receipts

Your tax preparer may be able to identify losses or deductions that you did not realize that you are eligible for. When you’re not sure whether or not to include it in the pile of papers — the “tax stack”– include it. One caveat: most tax preparers bill hourly for their time, so have your shoebox organized. You don’t want it to cost an arm and a leg to have your tax return prepared.

Another suggestion here is to start a cloud drive folder that you utilize throughout the year, so you don’t have to have the physical receipts. Make sure that your account is secure, but this can allow you to upload important documents throughout the year, and then all you have to do is simply send the shared link to your tax preparer (no hard copies required!).

3. Don’t Wait, Start Now!

Did you know that you don’t have to wait until you have all your tax documents before you give it to your tax preparer? In fact, it’s often more efficient to drop it off, mail, or send your tax information to the preparer when you have a majority of it. This enables your tax preparer to enter the information into the tax software, ask you any follow-up questions, and identify if there is any other missing information. Then, when you get that one last Form 1099 that you’d been waiting forever on, you can upload it to their secure portal or bring it by your tax preparer’s office.close up of female hands doing a calculation

If you know that you’re going to be out of town (don’t we all wish that right now?) during tax season, let your tax preparer know when you upload/drop off your tax information. There have been many times in the past that I would ask a client to sign Form 8879 (to electronically file their individual tax return), and the client was unreachable during one of the last weeks of tax season (thank you, spring break). This form cannot be signed until your tax return is complete, so letting your tax preparer know your availability is helpful.

4. SALY: Same as Last Year

This term comes from when I was in auditing, but it still applies to tax returns when comparing tax documents year to year. If you already used a CPA or EA to prepare your tax return last year, please remember that your tax preparer is not a mind reader (along with so many others who we think SHOULD read our minds, but I digress). That means if you don’t tell them what’s going on in your life, they will assume that your life is the same ol’, same ol’, with all the same tax documents that you had as the year before. Here are some questions to consider about last year when uploading/dropping off your tax information:

  1. Did you change jobs? Your tax preparer should expect a second Form W-2 from you.
  2. Did you start a new business? If you have a designated space in your home, you may be able to take the home office deduction.
  3. Did you have a baby? Based on your modified adjusted gross income, you can claim the child tax credit, the recovery rebate credit (that was the stimulus checks you may have received last year), and maybe the dependent care credit.
  4. Did you adopt a child? You may be able to claim the adoption tax credit and the dependent care credit.
  5. Did you sell your house? Your tax preparer is going to need your new address for the tax return and to determine if you owe any capital gains on the sale of the house.
  6. Have you stayed in your house but decided to make some improvements, such as energy efficient windows? Be sure to tell your tax preparer because you may qualify for the residential energy property credit.

Not sharing with your tax preparer what has happened in your life over the last year can mean losing out on some serious moolah.

5. Do It ASAP or File an Extension!

Having your tax return prepared in early April is not a great thing. Your tax preparer has been burning the midnight oil for the last four to six weeks. When I was working such long hours as a tax preparer, my eyes would get so tired that the numbers on my computer screen would get squiggly. Let’s face it; mistakes are going to be made.

A solution: filing an extension. I cannot TELL you how many people think that means that they will be audited by the IRS. It does not. It just means that you’re extending the time needed to file a complete and accurate tax return. However, it does NOT mean that you’re allowed to extend the time that you have to pay any taxes that you owe.

When your tax return is done, feel free to ask the tax preparer questions. You are paying for the preparation of your tax return, and you want to be comfortable with understanding the numbers. Also, ask your tax preparer if they have any planning suggestions for the upcoming year. This could include increasing or decreasing your withholding on a job, increasing your retirement and/or Health Savings Accounts (HSA) contributions, and when to pay a certain expense if it means a greater deduction (itemizing vs. claiming the standard deduction).

No matter what the situation, it often pays dividends throughout the year (as in less brain stress) to use a tax preparer, especially as your tax situation gets more complicated. Using these simple suggestions can help you get the most bang for your buck when it comes to using a tax preparer this season! Happy filing!

Maggie Klokkenga headshotI’ve been in the financial industry for over 25 years. Like Mary, I also was a bank teller in high school and loved working with people and their money. That led me to getting my degree in accounting and sitting for the CPA exam right before I graduated from Truman State University. I worked in public accounting, first in audit, and then in taxes, working with high-net-worth individuals and their families. I wanted to be more proactive with families and their money, so I joined an investment advisory firm and learned all about comprehensive financial planning while also getting my CFP®. I moved firms, staying with my same team, and recently struck off on my own to offer financial coaching for couples who are overwhelmed by saving for college for their children. I’m a married mom of three young boys and loving that I am creating a work life that is fully up to me.

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