Advising Clients at the End of the Year

When you are a solo or small firm accountant, the bread and butter of your business is preparing tax returns. Your clients need to feel that you are watching out for their best interests and wallets by preparing them for tax season.  As the expert, you know what they need to do and a checkup before the end of the year will show that you are looking out for them.

You never want a client to be surprised with a large tax bill when simple steps could have sheltered money from tax exposure.  Preparing 2018 returns will bring about a special set of circumstances given the new tax laws (link here to official name).

Take the time to follow up with your clients either with phone calls, emails, or general information on your website about the following issues:

  1. Did they follow the plan you discussed to limit tax exposure?  How much did they contribute to their retirement accounts, including any 401(k) and IRA offered through their company?  Did small business owners make the proper deductions? Did they take their RMDs? Pay their estimated quarterly income tax estimates?  
  2. Did they have any unanticipated changes or expenses?  Was there a substantial change in their financial situation that requires any maneuvering?  Did they start to make significantly less or more money? Did they inherit money, sell a house or have unusually high medical bills?
  3. What is their current tax exposure?  For your top clients (and those with potential), offer to do a planning meeting to look at some numbers.  Have them bring in their most recent W-2 and other details related to the taxes they have paid. Discuss what they have done in 1 & 2 above and then you can have an intelligent conversation about suggestions to lower their taxes.  
  4. Give them suggestions. A great accountant will make suggestions for clients to max out their retirement savings and other tax shelters.  Do not forget to mention: a)  Additional retirement savings:  Did both partners max out their 401(k)?  Could a small business owner add more?   b)   Gifts:  Did they make gifts to legitimate non-profit organizations?   c)  Purchases:  Purchases that are directly related to a business may be tax deductible. (You might want to explain depreciation at this time as well.).  
  5. Encourage them to get organized.  As an accountant you know the importance of maintaining organized records, but clients often come in with a shoebox full of receipts.  Now is the time to gather and organize all documents for a successful tax season.

We know it might be impossible to provide this level of attention to each and every client.  Pick a few to target or send out general information to your client base. Your goal is to save them money now and gather client loyalty in the future.