Tax Prep Checklist for Tax Preparers

Managing tax season efficiently starts with a well-structured tax document checklist that helps tax preparers stay organized and avoid last-minute scrambles. Gathering key documents and other information early, from clients’ income statements to their deductible expenses, allows for a smoother filing process and reduces the risk of errors or delays. Whether working with individuals or business clients, having a clear framework for collecting tax-related information can streamline workflows and help identify opportunities for deductions or credits.

Add new clients and AUM at your desired pace with SmartAsset’s Advisor Marketing Platform. Sign up for a free demo today.

What to Include in a Tax Preparation Checklist for Clients

Every advisor is different regarding how they approach tax planning, but there are some commonalities to consider when preparing for the season. As you create your tax prep checklist, you may find it helpful to break it down into different segments.

Here are some of the basic elements to include in a tax preparation checklist for clients.

1. Personal Information

You’ll first need to ensure that you have the correct personal information for each client you’re handling tax prep for. Of course, that includes organizing the following:

Name
Social Security number (or Taxpayer Identification Number)
Date of birth
Mailing address and physical address
Phone number
Email address

You’ll need the name, date of birth and Social Security number for any dependents your client plans to claim on their return. If you anticipate clients receiving a tax refund, you’ll also need their bank account information for direct deposit. Specifically, that includes the routing number of the bank and the account number they’d like their refund deposited into.

2. Income Information

After gathering your client’s personal information, you can move on to collecting details about their income. The types of documentation you’ll need here can depend on which sources of income they have, but your tax prep checklist may include:

W2 forms
1099 forms
Proof of business income
Proof of rental property income
Bank account statements
Brokerage account statements
Pension, annuity and Social Security statements
Unemployment compensation statements
Documentation for other types of income, such as gambling winnings or jury pay
Documentation regarding the sale of a home or other tangible asset

There are a variety of 1099 forms your client may present to you to prepare their tax return. Some of the most common include 1099-MISC, 1099-R, 1099-INT and 1099-DIV.

If your client receives alimony payments, you may collect documentation for that as well. Under the Tax Cuts and Jobs Act, alimony is no longer considered taxable income, but you may still need to account for those payments for financial planning purposes.

3. Deductions and Credits

Claiming every possible deduction or tax credit that your clients qualify for can help to lower their tax bill or increase their refund if they’re expecting one. The types of information you’ll need to gather for this part of your tax prep checklist can include:

401(k) contributions
IRA contributions
Health Savings Account (HSA) contributions
Charitable contributions
Medical expenses paid out of pocket
Mortgage interest paid (listed on Form 1098)
Child and dependent care expenses, if applicable
Adoption costs, if applicable
Tuition expenses and/or student loan interest paid (listed on Form 1098-T and 1098-E, respectively)
Records for state and local taxes paid, including personal property tax
Health insurance premiums paid out of pocket, if self-employed
Documentation showing any energy-efficient improvements made to a home
Records of moving expenses (for military members only)
Home equity loan or line of credit statements showing interest paid
Expenses associated with a rental property

The IRS accepts a wide range of documentation as proof when claiming deductions or tax credits. In addition to bank account statements or other financial account statements, you may ask clients to provide you with canceled checks or receipts as proof that they’ve paid a particular expense.

4. Business Information

If you have clients who are business owners, you’ll need to add a separate section to your tax prep checklist to organize that information. The type of details you’ll need can include:

Basic information about the business, including its structure and who owns it
Profit and loss statements or income statements
Sales records
Inventory records
Documentation for the purchase or sale of business assets
Vehicle records if the client plans to deduct them
Documentation for other deductible expenses, such as business travel, inventory, office supplies and rent or lease payments
Payroll records or documentation showing payments made to independent contractors
Charitable contributions made by the business
Fees paid for professional services
Professional membership fees
Costs related to career advancement or education

Again, the types of documentation clients may provide can include receipts, invoices, sales slips and deposit slips. If they work with independent contractors or freelancers, you may need to obtain copies of any contractors they have in place with those individuals as well.

5. Tax Payments

If your clients made any tax payments during the year, you’d need information for those as well. The most common types of payments they might make can include:

Quarterly estimated tax payments if they’re self-employed
Real estate tax
Personal property tax

You may also need to collect records of sales tax paid if your client plans to deduct those amounts on their return.

Marketing Your Tax Prep Expertise

If you’re a financial advisor who offers tax planning and/or tax preparation services, consider integrating these offerings into your marketing and business development efforts. Then again, you may be among the 85% of financial advisors who say it’s challenging to find the time to devote to marketing. In fact, advisors only spend just over two hours per week on marketing, a Broadridge survey found.

But automating your marketing and lead generation efforts can help you reach new clients more efficiently, potentially saving you time and energy. SmartAsset AMP (Advisor Marketing Platform) is a subscription-based service that can deliver hundreds of client referrals per year, as well as live phone connections with those leads facilitated by a SmartAsset representative. Using AMP’s Outreach Automation Tool, you’ll also have the ability to create and manage personalized, automated email and text messaging campaigns to help you stay in touch with prospective clients who may need a longer sales timeline.

Benefits of Using a Tax Prep Checklist

Two financial advisors reviewing a tax prep checklist for clients.

If you’re not an expert, knowing what boxes to check can make all the difference in improving the outcome. Even if you are an expert, it doesn’t mean you’ll remember every single thing every time ou do it. Creating systems and organized processes can benefit both you and your clients in diverse ways. From an advisor perspective, having a tax preparer checklist to follow can make it easier to:

Check that you have all of the documents necessary to do your clients’ taxes.
Complete client taxes accurately and completely, so that their returns are less likely to be flagged by the IRS.
Produce the best outcomes for clients by maximizing every tax break they’re eligible for.
Manage your time and avoid potential slowdowns resulting from missing or incomplete information.
Anticipate any questions your clients might have during the tax planning process.
Create a contingency plan should your client need to file an extension.

The overall end result is a better experience for your clients, which can yield yet another benefit. If clients are satisfied with your tax planning services, they may be more likely to remain your client for the long term. They may also be more inclined to refer you to friends, family members or coworkers, allowing new opportunities to expand your client base.

Bottom Line

A financial advisor putting together a tax prep checklist for clients.

Tax season can get hectic, but it doesn’t have to be overwhelming for you or your clients. With a tax preparer checklist ready to go, you can tackle tax planning for your clients confidently and with less time wasted. Being able to navigate these tasks more intuitively can help unlock more time for you to focus on growing your firm or better interacting with your clients.

Tips for Growing Your Advisory Business

Taxes take a lot of time and it may hurt your ability to keep bringing in new clients on your own. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Using tax planning software for financial advisors can help you keep track of everything you’ll need to help prepare client returns. If you’re already using financial planning software, you may have tax planning tools built in. The best financial planning software for financial advisors includes a comprehensive range of features at a price that’s affordable.