Avoid Tax-Time Surprises: Tell Clients What You Need

If your clients’ eyes glaze over whenever you talk to them about their taxes, you can use this time to explain – in plain, simple language they can easily understand – how you are helping them through tax planning: what you are doing on their behalf, why you are doing it and how it helps them.

Tax issues can be confusing, but major changes, such as the Affordable Care Act, may present large complications for some of your clients. They need to understand these changes, both to anticipate what to expect and to help you, the tax preparer.

“Tax preparers can explain to their clients that up-front planning is important in order to avoid large tax bills on April 15,” says Mike D’Avolio, senior tax analyst with the Intuit® Professional Tax Group. “For example, one way preparers can help is to make sure their clients have just the right amount of money withheld from their salaries.”

After asking clients how they would like to be contacted — through telephone, email or text — and how often, you can provide them updates about their taxes throughout the year instead of only during busy season. D’Avolio recommends preparers distribute “tip sheets” to their clients early in the year, with a follow-up a couple of weeks later, to address any questions they have.

“Keep the information at a high level, and don’t go into too much detail unless clients ask questions,” he says. “If they do, consider sending them the follow-up information in writing so they can better absorb it. Some clients want to know what they did correctly and what they did wrong, so they can make adjustments going forward.”

Other information you should consider providing to your tax clients:

• Explain to them that collecting the right kinds of information is an important part of your relationship. For example, various pieces of financial information will allow you to uncover deductions and ensure they do not pay more taxes than they are legally obligated to pay.
• Tell them what kinds of changes should prompt them to contact you, and be specific. For example, they should let you know if their income increases by more than 15 percent over the prior year, perhaps because of a bigger bonus.
• Let clients know specifically the kind of data and documents you need from them, such as W-2s or 1099s.
• Ask your clients to contact you to schedule a meeting to go over that information to be sure there are no overlooked deductions.
• Clients whose taxes are impacted by changes in tax law, such as the Affordable Care Act, should receive information, stated simply and clearly, on that as well. The information can either come in its own tip sheet or be included along with other useful tax information.

“Clients think that if they owe money at the end of the year, then it’s a bad year,” says D’Avolio. “You can explain to them that withholding and estimates are a big component of that equation.”

The more information you can provide to clients throughout the year, the easier tax season will be for them — and for you. A nice side effect of that can be higher client satisfaction with the services you provide, resulting in higher client retention.