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Tax Firm Preparation for Tax Season

From tax expert Gerry Vittoratos
January 25, 2018

We are already at the beginning of a new year! Tax season is around the corner and now is the time to prepare your firm for the upcoming season. What can you do to get ready? Read on…

Below are steps you should go through in order to get your firm ready. The steps are inspired by a great piece written by the AICPA in the United States, which you can access here.

Prepare Your Clients

Advise your clients through a newsletter of any important tax changes that are coming for the upcoming tax year. This way, they can start assembling the required documentation if this change affects them, and (hopefully!) there won’t be major shocks if the change affects their tax returns.

Provide incentives to your clients to come earlier to complete their tax returns. This can be done through discounts for coming by a certain date. This policy can free up your time to produce more complex returns later on in the season.

Review Electronic Filing Requirements and Processes

Before tax season begins, you should review if the requirements for EFiling have changed from last year. For example, was there an excluded return that is now eligible? This type of change can have an important consequence for your firm considering the filing requirement imposed by the CRA on your firm.

Before tax season is also a good time to train your staff on the firm’s procedures for EFiling. During this time, you can “iron out” any flaws in the procedure during the training with the feedback provided by your employees.

Review the Engagement Letter

Every year, your firm should review and update the engagement letter you remit to your clients. It should reflect the new realities of your relationship with your clients based on changes in the marketplace. For tips on crafting an engagement letter, see our previous instalment on the topic.

This is the time to also review your engagement letter policy. For example, a unilateral engagement letter, remitted with a tax organizer, might be the better course of action instead of customized letters for each client.

Prepare the Firm

Review and update your firm’s policies and procedures. Make a thorough assessment of your previous tax season and verify if any policy or procedure needs amending.

Evaluate your firm’s security policies, especially concerning your client’s confidential data. For tips on securing your tax practice, see our previous instalment on this topic.

Review the staffing requirements you will need by verifying the productivity of your staff from the previous year. Start planning the allocation of work to current staff, and determine what your staffing needs will be. If you hired independent contractors to produce returns, start contacting these individuals for their availability if needed.

Prepare Staff

Refresher training on applications used for tax season is advisable before tax season. It will likely have been many months since your employees have used some of the software required for T1 tax season.

Tax update training is a must right before the beginning of tax season. All new and expiring provisions should be reviewed and studied in detail.

Training on securing customer data is important during this time in order to reinforce the security policies and procedures that every employee should follow during the upcoming tax season.

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