Taxes: What Your CPA Wants You To Do Right Now

Last Updated Feb 8, 2011 9:18 PM EST

As the W-2s and the 1099s trickle into our house, my husband and I jam them into an empty space in the wine rack above the kitchen counter until we're ready to deal with them. I'm not sure what it says about us that we use a wine rack instead of the proverbial shoebox, but I'm not dwelling on it. We'll take the forms out (and maybe a bottle of wine too), and use the second half of the Super Bowl, after the kids are in bed, to take a first pass at our 2010 taxes.

I spoke to a couple of CPAs this week about what they wish their clients would be doing this week. In a nutshell: The earlier you start getting your papers in order, the more money you can save. The corollary to that, when clients are really disorganized, drives them bonkers. "If you come in with what's basically a shoebox full of information, my first thought is, 'What are we missing?'" says Craig Chilcote, a CPA with Eikill & Schilling in Duluth, Minnesota. "When a client doesn't have good records, you know we're leaving money on the table. We're not doing the best job we could because we're missing expenses."

Here's what your accountant is wishing you'd do to get ready for filing. Now.

  • Pay attention to the mail. Stick anything marked, "Important Tax Return Document Enclosed," in a folder. You should have started this about January 5, but some paperwork might still be coming in.
  • Then open your mail. It won't bite. Read it and make sure it makes sense. Investment or brokerage accounts can send out statements that are amended or revised two or three times. Make sure you have the most recent version. People frequently hand Chilcote their unopened envelopes, which stuns me, but he says he's used to it. "The problem is, if there's a mistake, I'm not going to know," he says. "But they would. Review those statements that you get."
  • Collect credit card summaries and go back through your checking account from 2010 and to look for expenses you missed that might be deductible: charitable contributions, for instance, or costs related to a job search.
  • Pull out your 2009 return. Look at it. You can use it as a guide for what paperwork you still need. If you're missing a mortgage or brokerage statement, you can make a call.
  • Don't forget the baby. "It's not unheard of for people to forget to tell me they had a child or adopted a child," Chilcote says. You might be sleep-deprived, but don't forget to mention any major change of life circumstances. Many accounting firms will send questionnaires to their clients for this purpose.
  • Beat the rush. If you feel confident you have all your information together, and you use a tax-preparation professional, make an appointment to get in. "We don't want to just be number crunchers, just putting numbers in the tax return," says Barbara Kogen, CPA, with NSBN LLP in Beverly Hills, California. "We like to see what we can do to think strategically to help the client, where we can say, 'Hey, maybe you could treat this this way or report that that way.'" All of which takes time, which is scarce during their 15-hour days in April.
Photo courtesy Flickr user Casey Serin, CC 2.0

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