What Your CPA Wants From You and How to Provide It

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Filing taxes—it’s a complicated ordeal that makes most of us feel grateful for our CPAs. Just turn it over to the tax professionals and skip the whole messy thing, right? There’s just one flaw in the plan: your CPA, no matter how skilled, can only work with the information you provide.

For accurate tax filings that minimize what you pay while keeping you in full compliance with the law, you need to give your CPA a complete representation of your financial picture. Additionally, since that usually involves many details and documents, your accountant appreciates receiving the information in a form that makes the job as fast and easy as possible. Here’s how to do both.

What to Provide

Some tax accountants will make it easy by giving you a tax organizer or checklist of everything they need. If you don’t get something like this, it doesn’t hurt to ask for one before you start gathering everything you’ll need.

However, with or without a checklist, you should start by reviewing the changes that have occurred in your life since your last tax filing and gathering records to document these changes. Remember to include:

  • Marital status
  • Gained or lost dependents (Did a child move out or graduate from college?)
  • Job changes
  • Moving
  • Buying or selling property
  • Gaining or losing health insurance coverage
  • Inheritances
  • Lawsuits and other legal activity
  • Retirement plan distributions or rollovers
  • Changes to your business (Note: business tax filings involve a number of financial issues to discuss in-depth with your CPA.)

Your CPA needs to know about these and any other changes that could have a financial impact. Next, you’ll need to gather records pertaining to:

  • Your job and other income sources, including unemployment income
  • Medical expenses and health-related savings accounts
  • Health insurance coverage
  • Interest and dividends
  • Retirement account contributions
  • Rental activity
  • Childcare costs and expenses to care for a disabled person
  • Charitable giving, including in-kind donations
  • Investment activity
  • Wages and tax payments for domestic staff
  • State and local taxes paid
  • Mortgage interest costs
  • Education (including saving for education and student loan repayments)
  • Bartering
  • Lottery winnings (lucky you!) and gains or losses from gambling
  • Work-related and professional expenses
  • Gains or losses stemming from a hobby
  • Casualty and theft losses
  • Estimated taxes paid throughout the year (include the amount you paid and the date)

How to Provide It

The key to helping your CPA is providing complete information. Your accountant needs to see all the tax forms you get even if you don’t know what they are, you think they’re wrong or they seem irrelevant. Be sure to submit any tax notices from the IRS or other taxing authority as well as the tax forms and schedules you receive: W-2, 1099, 1098, 1095, K-1, brokerage tax statements and all others.

It’s important to tell your accountant about all financial and tax details even if you don’t have documentation. If you don’t have complete, well-organized records, don’t feel bad – most people don’t. Just provide a detailed explanation of the changes or activities, and your CPA can tell you what documentation is required. You and your accountant can work together to acquire the appropriate records or reconstruct the financial details if necessary. 

Don’t hesitate to ask questions or share concerns with your CPA about any of the records you provide. It’s best to do so in person, rather than highlighting sections of the documents. Highlighted areas can easily be overlooked, and since your documents will most likely be scanned by firm staff, highlights can disappear or make the scanned document unreadable.

Finally, please don’t staple or paperclip your documents together! While that may seem like a helpful way to keep them organized, it actually makes your accountant’s job harder by slowing down the process of scanning and saving your records electronically.

When you provide complete information and follow these guidelines, you and your accountant become an amazing team: faster than a speeding deadline, stronger than a 75,000-page tax code, and able to leap tall filing requirements in a single season! Learn more ways to handle taxes like a superhero by reaching out to the tax professionals at HBP.