1. Update personal information
Accurate, updated information from your client makes it easier to jump right in on tax prep. Your clients can update their information online with the Canada Revenue Agency (CRA) if they need to make changes. That includes all their basic personal or business information, including a physical address, mailing address, telephone number, and direct deposit information. Then, it only takes a few minutes to make any necessary corrections.
You also want to make sure you have updated contact information in your records to contact your clients with questions if necessary when preparing tax returns.
2. Start preparing clients early
Reach out to all of your clients ahead of schedule to make sure they start preparing their documentation and collecting all applicable information that you will need to file their returns. As a certified tax professional in Canada, you must ensure that you're staying ahead of the deadlines and have all the required paperwork verified in time to prepare and successfully file your clients' taxes. For that reason, it is imperative to ensure clients understand what you need of them.
Starting the process early will give your clients adequate time to gather all necessary tax documents and supporting evidence they need. It also means less chaos and stress if you need to collect further information down the line, as you won't be racing against the clock. With steep fines for missing deadlines, it's vital to keep to a schedule that will allow for client filing on time.
3. Upgrade data security
Now more than ever, data breaches and security breaks are causing issues worldwide, as news outlets report on large corporations continually being hacked and data leaked. With so much important information and sensitive data on your computer, it's essential to ensure your cybersecurity is up to date and working well.
For that reason, before the tax season gets underway, be sure to use tools that help keep your information safe. The last thing you want is to inform your clients that their sensitive information has been compromised through your practice.
4. Switch to digital receipts
Arriving at the end of the tax year with a mountain of unorganized paper receipts can create problems for both you and your client. Digitizing receipts by scanning them into a computer or a smartphone can help your clients improve the accuracy of their records while saving on storage space. It also saves time for you because you don’t have to sort through paper receipts.
The CRA accepts digital receipts, so you can help clients out by suggesting they make use of apps such as Expensify or Dext. If you use QuickBooks Online Accountant or a similar type of accounting and tax software, make sure the app you recommend is compatible. That way, you can sync everything quickly and easily.
5. Consider using digital signatures and verifications on certain tax forms
Sometimes you might work on tax returns that belong to clients hundreds or thousands of miles away from your practice. Should you need to send them documents to sign and return quickly, digital signatures and verification software can help save you time, money, and stress overall.
The CRA has only approved certain tax forms for e-signatures, such as individual T183 and corporate T183 CORP forms, so it is essential to understand what parameters are allowed for these digital verifications. Learn more about the Government of Canada’s guidance on electronic signatures.
6. Make regular RRSP contributions or carry forward unused contributions
Individuals can make Registered Retirement Savings Plan (RRSP) contributions up to a couple of months into the next year, but your clients can handle RRSP contributions more smoothly and efficiently by making scheduled, pre-authorized contributions during the year. That works better than scrambling at the last minute to figure out allowable contributions and beat the deadline.
As a tax professional with expert knowledge in RRSP rules and contribution limits, you will want to help your clients set up a contribution schedule and guide them toward the contribution amounts that best fit their financial situation.
7. Prepare for possible tax deductions and credits
Meeting with clients before year-end gives you a chance to encourage planning for potential tax deductions or tax credit eligibility, such as charitable donations, childcare credits, or education expense credits. Because tax laws change and your clients’ personal and business situations may change, eligibility for deductions and credits may also change.
A meeting with your client is the best way to anticipate and prepare for tax credits or deductions and let them know which receipts or records they need to keep to claim those credits. Also, be sure to check with clients about all home office deductions, as more and more people have been working from home during the COVID-19 pandemic happening the last few years.
8. Backup Client Tax Returns and Files
The majority of people today have had a computer crash on them, losing irreplaceable files and information as a result. Do not let this happen to you with your client files. Such a loss could negatively impact the reputation of your accounting firm or professional services. Instead, back up your computer routinely to ensure the work you have done does not disappear. One way to do this is to back up all information on the cloud.
Backing up files in the cloud means that even if your computer crashes, all data is safe and sound, stored in a data centre separate from your computer. Ergo, before the busy time of tax season hits, you might consider switching your practice from desktop software to cloud software.
Tax cloud software is the most technologically advanced software that allows users to access files and data from anywhere when they use the internet to tap into their cloud account. This makes it an excellent tool for a tax return accountant to use, providing the freedom to work from anywhere knowing your data is stored safely online.