April 15 may seem light years away right now, but your accountant probably isn't just lounging at the beach only starting to work on April 1. In fact, he may already be gearing up to handle the work of many clients. Your accountant's job is to complete your tax preparation accurately and promptly—and save you money in tax-prep charges and by reducing taxes whenever possible.
To accomplish these goals, your accountant can function most efficiently when you:
1. Work with your accountant throughout the year to plan tax strategies.
It's impossible to take advantage of all potential strategies at the 12th hour. If you pick up your phone in August and call your accountant with tax ideas, he will have time to plan with you.
2. Start arranging receipts, income totals and all other tax information in an orderly way.
Don't just plan to hand your accountant receipts thrown into a shoebox. The more organized the information—and the earlier you start to get things organized—the quicker and more accurately your accountant can prepare your return. Quicker means greater savings to you, so do as much of the organization as you can.
3. Start preparing your information early and give the information to your accountant as early as you can.
Don't wait until April if possible. By then, your accountant will be swamped with last-minute details of many other clients. Handing over information then will increase the likelihood of errors and may even result in overpayment of taxes.
4. Save and organize all your receipts through the year.
Every time you make a purchase and someone hands or mails you a receipt, think of April 15! It's easier to simply save and organize receipts as they come in than to call or write for them as your tax deadline nears. File receipts in an organized way as they arrive to make things easier when you start preparing your information.
5. Inform your accountant of all possible deductions, from purchases to charitable donations.
Don't make your accountant ask for information about deductions.
6. Send all your tax information to your accountant in the same package.
This means receipts, income statements and totals, employee salary and benefit information, sales tax, dividend and interest statements, etc. Avoid calling your accountant five or six times with additional items you've discovered. This will add to the time required for tax prep and helps your accountant be more accurate.
7. Record vehicle usages and expenses in full.
If you deduct vehicle usage, keep your total and business miles as well as actual expenses for repairs and gas.
8. If you use accounting software, make sure it's compatible with your accountant's software.
This will reduce entry time, along with errors.
Think taxes all year, not just in April. Taxes are based on income and purchases throughout the entire year, so look ahead and consult with your accountant while he has the time to plan with you. The more organized you are throughout the year, the easier April 15 could be on your mental well-being.