2019 Year-End Tax Planning
2019 Year-End Tax Planning Tom O’Saben, EA, talks us through some year-end considerations as we zoom closer to 2020. Join us for the next 10 minutes as he touches on…
January 6th, 2020
For better or worse, the 2020 filing season is upon us. While you are gearing up now for the deluge that is February through April, I wanted to share some helpful tidbits to get you through the crunch.
I will start with my mantra that gets me through every project I tackle:
Question: How do you eat an elephant?
Answer: One bite at a time!
(If anyone is offended by my unkind treatment of elephants, we’ll say it was the carnival food known as an elephant ear.)
So let’s look at some other ways to get through the coming tsunami:
As a preparer, I did 1,000 – 1,200 returns per year, but I’ve heard of preparers who do twice that number. How is that possible? Begin by breaking the task into smaller, more manageable bites. Decide to accomplish getting through X number of returns per day or week and then evaluate how you’re doing. Remember not to set your goal too lofty or too easy. Too lofty will result in disappointment. Too easy will result in complacency and pile up work for later.
Think you can continue to do it all by yourself this filing season? Think again. Doing everything yourself will result in you, by human nature, working on the “low hanging fruit,” which also means the more challenging and distasteful tasks are left to pile up. If you’re wondering where your best employees may come from, it’s not from your brother-in-law’s sister, but likely a good fit might be right in front of you within your clientele. Think about those clients who are meticulous, detail-oriented, and may actually express an interest in how your practice works. Also, do what I failed to do last year. I told myself I would test any potential preparer before making a hiring decision. However, I became “star struck” by a resume and hired a person based on that resume. It resulted in one of the worst outcomes I’ve ever encountered. Listen to your intuition and follow it! Good staff can make you more efficient and may save your sanity.
One of the things I’m going to do this season is to send an e-mail in January asking for my business clients who either do their own books or have bookkeeping services outside of my firm to get me their data now rather than waiting for the scheduled appointment time. Hopefully, if this works out, our appointment will be for answering questions and wrapping up their return instead of gulping at the prospect of being forced to file extensions because data is missing. Clients are procrastinators by nature. When you combine that with a tax professional procrastinator (namely me) the combination leads to much stress, late filing, and more mistakes because of the pressure and stress. One more suggestion here: give your clients a date to get you the information you want rather than giving them an open ended request. Everyone normally functions better with assigned deadlines.
I hate to say that our clients are like little children, but they really can be. Just like the notion that children do better when given rules, parameters, and structure, tax clients need to be told what we need, when we need it, and in what condition it should be presented to us (no bags, no boxes). We can’t expect them to just know what we want and how we want it. Just because they have been to a tax professional before doesn’t mean the previous firm’s requests are how you will want their info submitted to you.
I’m guilty of this all the time. The translation of the above statement is that I haven’t opened your file yet and I likely am rolling my chair around on it. Give your clients a realistic idea of when you can get back to them with results or questions you have and then note it on the file or in your office data management software so a staff member can follow up rather than you taking valuable time to say you’ve missed your self- imposed deadline. Our office is going to try ATOM this year after hearing good things about this office practice management software from other professionals. This is not an endorsement since I have no experience with the software, but something has to be better than my current system (or lack thereof).
I’ve certainly read all of the helpful tips about cleaning off your desk, so it would be disingenuous to suggest you clear off yours.
Hmmm…Great minds think alike?
The reality of Tom’s world…You know what’s even scarier? My office at home looks the same. My garage looks the same. My basement looks the same. BUT, my office in Maryville IL doesn’t look like this because Sue, my boss, won’t stand for it! I’m not sure what Einstein’s garage looked like.
Tax laws seem to be ever-changing and returns become more complex all the time. Rather than putting off the tough returns until the end of the day or the end of the week, tackle those first. From my perspective, I’m at my best early in the day. At the end of the day is when I should be doing what I call “palate cleansers” (simple returns). But be careful; complacency is a recipe for disaster. As my 7th grade math teacher once said, “It can be so easy that it’s hard.”
How do we stay focused? Many of us have all the traits of adult ADD, but I’ve also been told that makes us good multi-taskers. But how many times, especially when there’s no client sitting in front of us, do we become distracted by the wonders of the internet, such as Facebook or even just e-mail? If you’re like me, it takes very little to shake me off the task at hand…Oh goody! The mail is here!
Don’t be afraid to say ‘no’ to that new request, new client, or “can you help my brother-in-law?” question. I know it’s tough to admit when you’re at the saturation point, especially after years upon years of shaking the bushes for any and every living breathing return. But continuing to take on more and more will result in more stress, more mistakes, more missed deadlines, and perhaps damage to your most important commodity—your reputation. If you want to continue to grow, perhaps a merger is in order if you don’t want to expand your practice further.
I’ve known too many practitioners who were, on their last day of life, at their desk. Think about the physical, emotional, and psychological strain you endure every day. I bet for most of you, a normal week during tax season eclipses 100 hours. Rather than binge-eating at the end of the day, have more numerous and smaller meals throughout the day. Avoid the sugar and caffeine highs and lows by balancing what you eat. Want to know another secret my grandpa always did? After lunch, before he went back out into the fields, he took a 15-minute power nap. Not enough to go deep into sleep, but enough to recharge the batteries. I’ve been doing that for 28 years right at my desk and let me tell you– it works. A quick walk around the block around mid- afternoon can work wonders as well.
Clients love to bring us little gifts of food and drink. Share it with your staff. How about if you get a chance to leave the office briefly and you bring donuts back or have a pizza day? The more spontaneity, the better. My first boss used to have ‘profit-sharing day’ in which she would split up cash received for the day between us all. (Yes, I’m sure she still reported the income). Those little gestures can go a long way to greater productivity and a more agreeable workplace. But don’t be predictable, because every Tuesday’s pizza can quickly become next Tuesday’s ‘expected’ lunch.
It will give you something to look forward to during those dark and dreary days of February and March. The prospect of getting away may even make you more productive so you can enjoy your time away without worrying about all those extensions back in the office.
Let me assure you that we will be with you throughout the filing season.
We’ll be with you all the way!
Let’s do it!
Einstein Desk photo: https://time.com/3494553/the-day-albert-einstein-died-a-photographers-story/
Animal House clip: https://www.youtube.com/watch?v=ZUYXOM_EJiI
by Tom O’Saben, EA
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