Every year tax accountants mail, or e-mail, tax organizers to previous year clients usually containing a listing of questions to be answered, some basic personal information and a series of pages for the client to provide current year information for wages, investment income, itemized deductions and various other activities, deductions and credits that were applicable in the prior year. It all looks so long, so boring, and for many people the tax organizer is not understandable. I get it – it’s not interesting to the average person.
Some clients complete the organizer and provide all of the information requested. For those of you that are in this category, you can skip the remainder of this article. For those still reading, here are three good reasons to complete the organizer that you may or may not be aware:
-It may save you time as your accountant will be less likely to contact you to request additional information.
- The organizer helps you make sure that you do not forget to provide relevant current year information to the tax preparer. Many tax organizers not only ask for information for the current year, but also provide your prior year information which will remind you to provide similar information this year if it applies. If the prior year item does not apply it also gives you the opportunity to indicate that it does not apply this year.
- Answering the list of questions will provide your tax preparer with information to complete certain portions of your tax return without additional questions. This is especially important now with questions regarding health care coverage, identity theft and additional documentation checklists that must be completed for the earned income tax credit, child tax credit and additional child tax credit.
-It may help you reduce your income tax.
- Answering the list of questions may prompt you to ask your tax preparer if there are additional tax deductions or credits available and if you qualify for such credits. Even if you do not understand why the question is being asked, completing the questionnaire should trigger the tax preparer to contact you if your question indicates that you may be eligible for a deduction or credit.
-It will get your return completed more quickly and may save you on preparation fees.
- Completing the organizer and providing the underlying documents in a similar order allows your tax preparer to prepare the return more quickly and easily as most organizers are arranged with ease of data entry in mind. Answering all of the questions on the questionnaire will allow the tax preparer to complete the appropriate sections of the return more easily. Providing your underlying tax documents without completing the organizer will force your tax preparer to either organize the documents in the order to be entered or complete the organizer and then perform the data entry. For those of you who are billed on an hourly basis by your tax preparer, any time organizing documents and not spent preparing the return will cost you money in additional preparation fees. For those who have a tax preparer who does not bill hourly, it is easy for the preparer to pick the tax return with the most organized and complete information first when multiple clients drop off their tax return information on the same date.
These are some reasons to complete your accountant’s organizer. They would not send it to you hoping that you do not fill it out. If you are not persuaded to complete the organizer because you do not understand the form, you should schedule an appointment with your tax preparer after tax season is over and ask him/her to explain the pages to you.