Tax organizers are great tools. But they’re not for everyone.
CPAs offer tax organizers to Clients who want to use them. Tax organizers are comprehensive questionnaires on all issues of a particular tax form. They’re generally used by individuals for their Form 1040, but I offer tax organizers to S Corporations, Partnerships etc. Here’s some of the advantages to tax organizers:
- You get to compare last year’s tax items to this year’s. This helps spot missing information for the current year.
- The tax organizer communicates changes from last year to the CPA e.g. a new child adds an exemption worth maybe, depending on circumstances, $1,000 of tax savings.
- Tax organizers show the entire gamut of potential legitimate deductions and credits. Sometimes folks find current deductions and credits they didn’t know about.
- Sometimes I pickup on potential deductions and credits from the tax organizer.
- Sometimes tax organizers help with tax positioning for the next tax season.
- Tax organizers organize. That saves some folks time and frustration.
- Tax organizers help make the tax return more accurate.
Using last year’s tax return to organize this year’s tax information
Most tax planners follow the flow of the IRS tax forms, albeit better presented and explained. I always compare last year’s return to the current tax return as part of the quality check. But you could use the past tax return as an organizer.
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