Get Ready for Tax Season: Essential Steps to Simplify Your Filing Process

2025-02-25

Reading time: 6 minutes

It is that time of year when you receive envelopes marked “Important Tax Document Enclosed.” You think to yourself, “It can’t be that time already since I just finished last year’s taxes!” But, as they say, time flies and tax season is upon us again.

You may have just received an email from our firm asking you to review and electronically sign our engagement letter. This is a new system for us, and we hope it goes smoothly. The goal is to make it as easy as possible while also making sure that we are on the same page with the services we will provide.

So, now you know it is time to start getting information to your tax advisor, but you don’t even know where to start. I suggest you gather, organize, communicate, and then assist.

Gathering Tax Documents

One of the first steps is to round up all of those tax documents you have received in the mail or electronically. Documents such as:

W2: These report your wages and withholding from your employer.
1099INT/DIV/B: These provide your investment income.
1099R: These report your retirement income, including non-taxable rollovers.
1099NEC/MISC: These forms provide your non-employee compensation and other income.
1098: Indicates your mortgage interest paid and often property taxes.
K1: This schedule provides your share of income or loss from businesses that you own, including private equity and often real estate.
1095A/B/C: All of these provide information about your health insurance.

We need all the above to properly and efficiently work on your tax filings. Even if you don’t think they are important or have small amounts on them, they may still be important for us.

In addition to official forms, you will also need to gather other information that may not come on a standard tax reporting form but are necessary for us, including:

Charitable Contribution Statements: These will provide how much you donated to church or other charities throughout the year.
Property Taxes: This should provide your property tax payments on real estate that you own.
DMV: A portion of your DMV fees may be deductible.
Real Estate Activity: Closing statements for either purchases or sales of real estate.
Crypto Activity: If you sold or exchanged any cryptocurrency or virtual currency during the year, we will want to know about it and have you provide us with your gain/loss report. Remember, even if you transferred from one cryptocurrency to another, that is likely still a reportable event that we need to know about.
Foreign Activity: If you have a foreign bank account, are a signer on a foreign account, or have other foreign assets or businesses, we want to know about that so we can discuss the reporting requirements.

If you own a business (even side gigs) or real estate rentals, you should also be gathering and summarizing each activity separately:

Revenue: Amount that you collected during the year- even if you did not receive a 1099NEC/MISC tax form.
Expenses: Amounts you paid out summarized into logical categories.
Accounting: If you use accounting software, you will want to provide your tax professional access or the necessary information. We find it especially useful if you provide a Profit and Loss Statement along with your Balance Sheet in a comparative format that shows both 2024 and 2023 activity and your 2024 General Ledger.

Although we do not require you to provide receipts and verification of expenditures, you will want to be sure to save them for safekeeping in case you are asked to provide them under governmental examination. Often, we may ask for bank statements, loan statements, and other information if we know it will make everyone’s life easier or your tax filings more accurate.

Sometimes, even the most basic items are forgotten about, such as:

Changes in marital status
Changes with dependents (new children, children moving onto independence, etc.)
Changes of address even after year-end
Changes to bank accounts for direct deposit or automatic withdrawal

There is often some information that may be specific to your industry or situation, which you will obviously also want to provide to us. You likely know this because we ask about it each year, or you purchased solar panels, energy-efficient home improvements, or an electric vehicle and know to notify us if there are any tax benefits.

Obviously, if you have received a Tax Organizer from us, it is always suggested and helpful that you fill it out as completely as you can and provide your relevant information.

Organizing Your Information

So, now you have all of those envelopes opened and have what you think are all of your tax documents. We usually suggest taking a quick look over the information. Remember, no one knows your financial life better than you do. You know who you work for or with, where you have your investments, what property you own, and where you spend your money. If you think you are missing something, you likely are and should reach out to them for your official tax forms.

We ultimately store and work with files electronically, so if you can provide them to us electronically in a clean and readable format, that works best. Original Adobe/PDF files are best. Scanned paper documents into Adobe/PDF is second best. Pictures taken with your phone are a distant third. We can also work with paper documents sent to our office where we will scan and digitize them.

We love original Adobe or PDF documents because they are easy to read and for us to store. For the documents you already have electronically, that is great; keep them in their native PDF/Adobe format, and there is no need to print them. For those documents where you received an emailed link, we will need you to download the document in PDF/Adobe since we do not know your secure login information. Some documents simply arrive via the mail, and you do not have the electronic versions. If you can scan those into high-quality Adobe files, that is best, while a picture of the document or mailed-in documents are also acceptable, although not as desirable. Obviously, a one-off picture of a document with your phone will happen, and that is fine.

Communicate

Each of our professionals and staff has a secure upload link where you can send documents. If you do not have an upload link or yours has expired, simply request one from our team. We always suggest trying to send multiple documents in a single upload link, meaning you can attach multiple separate documents in a single upload session. This makes it easier for us to receive information.

We find it helpful if you also send an email indicating that you have uploaded your documents and provide any other narrative information you think we may find helpful, or just to say hi, and let us know how you are doing. It also allows us an easy reminder to respond, and let you know that we have received your information.

Assist

After you have gathered, organized, and communicated your tax information to us, our process involves digesting that information, preparing your tax filings, and providing feedback to you. We will often have follow-up questions, comments, concerns, or ideas for you. The goal of these inquiries is to make sure that you file a complete and accurate tax return and also pay the appropriate amount of tax.

To help us help you, we suggest that you:

Be Early. The earlier you get your information to us, the better we can provide you with timely service.
Be Transparent. You are ultimately responsible for your tax filings, so the more information that you provide to us, the more accurate the tax return will be. If you are unsure if we need something, please let us know, and don’t hide information from us, please.
Ask Questions. There is a lot of tax misinformation (or half-information) out there on social media. A lot of what we respond to is clarifying these items posted on social media or from discussions with your friends. If you think something may apply, feel free to ask — We most likely have already considered it, but we are usually more than happy to let you know.
Be Patient. We know you are anxious and want quick turnaround. We do not want to intentionally “sit” on your information, and we will do our best to communicate with you regarding the status of your filings.
Respond Promptly. When we ask a question or provide a list of items we need, take it seriously, and get back to us as quickly as possible. If we are asking for a document, it is because we do not see it in our files and would appreciate receiving it from you.
Understand Extensions. Often an extension is not only desired but simply needed when information is not received yet, especially Schedule K1s, or other more complicated situations. We still need as much of your information prior to the original due date, so we can advise on any tax due at the extension time, or provide you with an estimate of what the results may look like.

Your assistance in being timely, transparent, inquisitive, patient, and responsive will enable us to provide you with the best possible service.

PKF North America News

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