Tax Season 2021: What CPAs need to Know

Tax Season officially begins on 12th February 2021 for individual tax filing of returns.

IRS has also sent out the steps to speed up the refund process and get started with the process.

This busy season often brings about a humongous amount of workload and stress for CPAs. In order to avoid last-minute hassle and missed deadlines, it is advised to start preparing for return filing early.

Here is all you need to know for Tax Season 2021:

Important Dates

• 15 January 2021: Opening of IRS Free File. Taxpayers can start their filing process in advance through Free File partners, and returns will be transmitted to IRS on 12 February 2021. Moreover, Tax Software companies have started accepting tax filing as well.
• 12 February 2021: IRS starts accepting and processing individual tax returns
• 22 February 2021: Where’s My Refund tool projected to be updated for the individuals claiming EITC and ACTC (also called PATH Act returns)
• 15 April 2021: Tax Day or deadline for 2020 return filing
• 15 October 2021: Extended deadline for 2020 tax filing

Tips To Note For Filing Tax Returns

1. Start Early

Even though there’s still time for the tax filing deadline, starting the process early can be beneficial for you. One of the significant reasons for this is early refunds. The chances of receiving the funds faster and on time are increased manifolds.

Moreover, it gives you enough time to sort through your taxes, collect the receipts, and check income reports and calculations.

2. Gather Documents

Before starting with the tax filing, CPAs need to collect various documents and required information from their clients. Some of the crucial documents are:

• Identity proof with social security number and date of birth
• Income-related documents and receipts
• Proof of any losses
• Adjusted income

Gathering the data mentioned above from clients is essential before starting the taxes as it helps to streamline the process. Making a checklist of all the information you need in advance is a good practice to achieve the same. It helps save time and hence, improve your efficiency.

3. Organize Process

CPAs and other financial practitioners have a lot on their plates during the tax season. Therefore, it is crucial to plan a strategy to manage the filing process.

One of the foremost things should be categorizing each task depending upon their priorities. It would give you a clear picture of the job that should be preferred over others. You can work on important tasks and delegate the less important jobs to your subordinates or associates.

Furthermore, setting goals for each day and having deadlines can help to achieve targets in time.

Recommended Reading: Tax Season 2021: Checklist For Tax Professionals

4. Stay Updated

Tax laws and regulations are constantly changing. Therefore, it is crucial to keep yourself updated with the latest tax news and reforms.

Following the IRS website and other reliable tax-related news resources are an excellent way to keep up with these updates and stay informed. Misinformation can often lead to tax filing errors that can account for penalties and delays in tax refunds.

Going through all the tax laws before the tax season begins can help CPAs stay on top of their game and make a mark in the market.

5. Utilize Technology

Advancement in technology has led to a transformation in business operations. Adopting various technological solutions during the tax season can ease the task for CPAs, tax professionals, and accountants.

For instance, cloud computing provides the flexibility and mobility for better productivity. Moving tax and accounting practice on the cloud during the tax season will ensure anytime, anywhere access to the data and even desktop applications. You can also access it from any internet-connected device like tablets, smartphones, and laptops by merely logging in to your password-protected account.

Moreover, most of the competent cloud hosting providers offer the ability to upscale or downscale the resources depending upon the task’s requirement.

6. Secure Data

Securing client’s data is imperative for CPAs. Tax Season is one of the most challenging times to do so as cyber-attacks and fraudulent activities are on the rise during this process.

Therefore, implementing various security standards is vital for safeguarding the information.

Invest in cyber-security and ensure different steps, including data encryption, anti-virus, anti-malware, firewalls at every level in a network, authentication system, etc.

Furthermore, regularly backing up data in local and cloud servers can help retrieve information even in case of any loss.

7. Prioritize Health

The stress of tax season can often take a toll on the health of the CPAs.Hence, it is crucial to take care of your health during this time.

Take regular breaks from work and don’t miss your meals. Drinking water regularly is also essential to keep yourself hydrated throughout the day. Taking care of your physical and mental health further ensures better productivity and efficiency rate.

Coronavirus Aid And Tax Filing

The outbreak of the COVID-19 (Coronavirus) pandemic has impacted the lives of each individual. It is critical to note that the government has come up with various changes that need to be considered while filing tax returns this year.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act offers up to a $2 trillion relief package wherein the government sent stimulus checks of $1200 to millions of Americans. These funds will not be accounted as taxable income for individuals.

Besides the stimulus check, CARES Act also covers unemployment benefits, the Paycheck Protection Program (PPP), and educational expenses that can be considered when filing taxes this tax season. Cloud-based tax filing in the Covid-19 will be a great help in the tax season 2021.

To Sum It Up

Tax Season 2021 is just around the corner. This blog covers some of the crucial points CPAs need to know for a successful season.

In addition to the points mentioned above, you should create an account on IRS.gov for further help and the latest updates.

For more information on how you can streamline the tax filing process, you can contact our Solutions Consultant at +1-855-223-4887.