It’s everyone’s favorite time of year again: tax season. Believe it or not, there are ways to make your busiest time of year more manageable.
Keep reading for our three best tips or click here to jump straight to the checklist.
How to prepare for tax season (3 tips)
1. Review last season’s tax season debrief
Before jumping into planning mode, you need to understand what worked and what didn’t during your last tax season. Ideally, you and your team have already had a post-tax season debrief meeting to identify and address your busy season challenges. If not, that’s OK—but make it a priority for next year to gather feedback while experiences are still fresh.
Consider implementing these review strategies:
- Encourage team members to share specific pain points and successes.
- Document feedback while it’s fresh rather than waiting months.
- Create a system for tracking issues in real-time during the next tax season.
Here are the key areas your post-season assessment should cover:
Client communication and documentation
- Engagement letter process and signature management
- Information gathering procedures
- Management of missing or incomplete information
- Document scanning workflows
- Return delivery methods
- Billing and payment collection processes
Internal processes
- Tax preparation procedures and tools
- Return review processes and timing
- Team communication effectiveness
- Staff training needs
- Technology utilization and pain points
- Team collaboration and morale
Encourage every team member—both those directly handling these processes and those impacted by them—to document their experiences during tax season.
Whether it’s celebrating wins or identifying bottlenecks, these real-time insights are invaluable. When your team sees that their feedback leads to meaningful improvements, they’re more likely to stay engaged in making each tax season better than the last.
Consider creating a simple system for capturing these observations, whether through a shared document, regular check-ins, or even a dedicated Slack or Teams channel. The key is making it easy for your team to share their thoughts while the experiences are fresh.
2. Calculate your tax client capacity
If your team struggles to keep up with the volume of work during tax season, you have too many tax clients. Here’s how to determine the maximum amount of clients you should have:
Tax season client capacity formula
First, determine your variables. (We’ll include some example numbers to help explain the calculation.)
- Average time per tax return: 1.5 hours
- Non-tax season staff utilization: 75%
- Ideal hours during busy season: 44 hours/week
- Busy season utilization percentage: 110%
- Number of staff members working on tax returns: 3
- Number of weeks working on tax returns: 14 (8 weeks busy season + 6 weeks extension season)
Calculation steps
1. Utilization difference:
- Maximum tax season utilization percentage: 110%
- Subtract non-tax season utilization percentage (75%) from busy season (110%): 35%
2. Weekly extra hours:
- Multiply the utilization difference (35%) by ideal weekly hours (44): 15.4 hours
3. Total weekly staff hours available:
- Multiply extra hours per week (15.4) by the number of staff (3) = 45 hours
4. Total capacity for tax season:
- Multiply available weekly hours for tax returns (45) by the number of weeks (14): 630 hours
5. Total returns capacity:
- Divide total capacity hours (630) by average time per tax return (1.5 hours) = 420 returns
Total capacity for tax returns = 420 returns
If your firm typically does around 700 tax returns…and you’ve determined that your tax return capacity is 420…that’s quite a large difference. It may be time to consider which clients need to go. Clients with a low realization rate may be better suited for another firm.
3. Audit your tech stack
How many ways can clients send you documents? Are staff members using any tools or gadgets to make their day-to-day easier? Find out. Then:
- Cut the extra: Eliminate any unnecessary tool or application that staff members aren’t actively using. More apps = more risk.
- Create an “App Map”: Share a guide to the software, applications and tools your firm is using, and for what purpose. (You should have most of this done, anyway, as it’s required by the IRS.) Create a client-facing version with instructions and a timeline on the tasks you need them to do (i.e., uploading documents, signatures.) This eliminates the need for you to walk them through tasks at your busiest time of the year, ensures their information is paperless and secure, and shows them you are making their data privacy a priority.
Having the right tools in place before tax season starts is crucial. If you need help curating your accounting firm’s tech stack, feel free to reach out to our team.
Remember: the goal is to simplify and streamline, not complicate. Make changes gradually and implement any new technology well before peak seasons.
Tax season preparation checklist for firm leaders
If you made it all the way down here, impressive! As promised, here’s the ultimate tax season prep checklist for you to print out, save or share:
Post-season assessment
| ☐ | Have we shared the post-tax season debrief from last year with our team? |
| ☐ | What specific pain points did our team identify from last tax season? |
| ☐ | What processes worked well that we should maintain or enhance? |
| ☐ | Have we documented feedback from all team members involved in tax preparation? |
| ☐ | Do we have a system in place for real-time issue tracking during the upcoming tax season? |
Client communication and documentation
| ☐ | Have we evaluated the effectiveness of our client communication methods? |
| ☐ | Is our engagement letter process streamlined and efficient? |
| ☐ | How can we improve our information-gathering procedures? |
| ☐ | Do we have a clear process for managing missing or incomplete information? |
| ☐ | Are our document scanning workflows optimized? |
| ☐ | Have we assessed the effectiveness of our return delivery methods? |
| ☐ | Is our billing and payment collection process clear and efficient? |
Team capacity and workload
| ☐ | Have we calculated our firm’s tax client capacity? |
| ☐ | Are we taking on too many clients relative to our capacity? |
| ☐ | Have we identified low-realization clients that might be better served elsewhere? |
| ☐ | What is our plan for managing workload if we’re over capacity? |
| ☐ | Have we analyzed our staff utilization rates during both busy and non-busy seasons? |
| ☐ | How many hours per week are we expecting staff to work during tax season? |
| ☐ | Do we have the right number of staff members working on tax returns? |
Technology and tools
| ☐ | Have we audited our tech stack to eliminate unnecessary tools? |
| ☐ | How many different ways can clients communicate with us, or send us documents, and is this causing confusion? |
| ☐ | Have we created an “App Map” guide for both staff and clients? |
| ☐ | Are we compliant with IRS requirements regarding our technology usage? |
| ☐ | Have we implemented tools that can help process returns faster? |
| ☐ | Do our staff members have the gadgets or tools they need to make their day-to-day work easier? |
| ☐ | Is our client portal user-friendly and secure? |
Work-life balance
| ☐ | Have we established policies that help staff maintain their normal routines during tax season? |
| ☐ | How are we encouraging team members to prioritize their well-being? |
| ☐ | Have we set reasonable expectations about work hours during tax season? |
Daily operations
| ☐ | Do we have a system for helping staff set and track their priorities each day? |
| ☐ | Have we established clear metrics for daily productivity? |
| ☐ | What methods are we using to track progress toward season goals? |
| ☐ | Do we have regular check-ins to address bottlenecks quickly? |
Team morale and celebration
| ☐ | What fun activities have we planned throughout tax season to maintain morale? |
| ☐ | How are we celebrating accomplishments during busy weeks? |
| ☐ | Have we scheduled a special event or day of fun to mark the end of tax season? |
| ☐ | Are we recognizing individual and team achievements regularly? |
| ☐ | How are we keeping the atmosphere positive during stressful periods? |
Training and development
| ☐ | Have we identified staff training needs based on last season’s experience? |
| ☐ | Do team members have access to necessary resources for professional development? |
| ☐ | Have we scheduled training sessions well before the busy season begins? |
| ☐ | Are we effectively onboarding any new team members? |
| ☐ | How are we tracking and addressing knowledge gaps? |
Post-season planning
| ☐ | What system will we use to capture observations and feedback during this tax season? |
| ☐ | Have we scheduled a post-season debrief meeting? |
| ☐ | How will we document lessons learned for future reference? |
| ☐ | What metrics are we using to evaluate this tax season’s success? |
| ☐ | What changes do we want to implement for next year? |
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