Tax Season 2022 - What Worked and What DID NOT

I was certainly relieved when the tax filing deadline came and went on April 18th. While things were still fresh on my mind, I took some time to start thinking about what worked well and what did not.

As someone who has been a practicing CPA for over 30 years now, I have seen my share of tax seasons and no two are ever the same. You would think that someone who has been doing this for so long and is a stickler for process would have this down by now, but one thing we all need to remember is that nothing is ever perfect. We need to keep adjusting, changing, and striving to make the process easier.

I'm starting with the things that did not go as well this past tax season because I am my own worst critic and know there is always room for improvement. I will follow that up with the good things, and you will see that some things that I say did not go well are things that also helped make the season go better.

The NOT so good of the 2022 tax season

There were three areas that were not so good for me in 2022. As you will see, all three areas do have the other side of the coin where parts were good but need to get better.

1. Communication

We can ALWAYS do a better job of communication. I have always communicated with my personal tax return clients that they need to have their documentation to me no later than April 1st or they would need to go on extension. And in order to do a proper extension, they would need to have documentation to me no later than April 8th, since (as we know) the extension does not extend the time to pay.

Following two years of changed due dates at the federal & local levels due to COVID, it seemed to me that people forgot that April 15 is the day! Well, April 18th this year. I should have done a better job of communicating and reminding people of the date well ahead of tax-filing season. Part of the reason for that lack of communication is not having one central CRM or practice management software that can send out mass communications.

I use Liscio. It works great; read on to understand why it is included in my list of what went well. The issue for me was NOT having transitioned all of my clients to this great tool. My goal for the remainder of 2022 is to get ALL of my clients utilizing Liscio and getting out of email.

I also am in the process of exploring Canopy, an accounting practice management solution that may act as a backup for clients who refuse to adopt Liscio.

2. Document Access / Retrieval

Document access and retrieval are age-old issues that rear their ugly heads not just during tax season but year-round for CAS work (Client Accounting Services). It can be challenging to get the documentation you need to do the work you are hired to perform.

I am sure you have heard this one before. “I sent my documents yesterday, is my return done?” The replies that you say in your head can be quite colorful,

"Geez, how did you send your documents?"
"Sure, I am just sitting around waiting to work on your return."
"You sent a W2, but what about the 25 K1s you have?”

Does any of that sound familiar?

With some clients, getting documents was easy (and will be discussed later in what went well). What didn't go so well was that I didn't communicate the importance of file naming conventions and the use of tags. As a result, I spent a lot of time doing this type of task that could have been done very easily by the clients.

3. Work/Life Balance

Anyone who has gone through a tax season or two knows it is very difficult to manage professional and personal and family needs. The time constraints of hard tax deadlines along with the fact that tax software companies do not have all the forms available early enough makes tax season even more compressed.

In the section below on the good of this tax season, you will see that this same topic is also good. The bad part of it was at times, I expected I could get more done in the time I scheduled for work, and it never worked out that way. Again, sound familiar? Because of the good aspects of tax season, I may have had expectations that were a little overly optimistic, so I need to make sure to reset those expectations next year and continue to get better.

The GOOD of the 2022 tax season

1. Work/Life Balance

I know I said this was a not-so-good aspect of this tax season, but it WAS still good as well. Let me explain.

My two youngest daughters play lacrosse at the collegiate level and lacrosse season begins in mid-February. Well, throughout my children’s lives I have missed very few events of theirs and I do not want that to end. I can say that I did NOT miss any of their games this year. I was present at all of them except for two which were televised, and I spent that time watching them.

When I did travel to watch their games, I always had my backpack with me that held my laptop, a portable monitor and trusty MiFi. This "office in a bag" allowed me to work in hotels without missing a beat. Having web-based tax software along with other web-based software makes a ‘mobile’ office wherever I can find a quiet place to sit! When not traveling for games, I was also able to make sure to have dinner with the rest of the family every night and not have to ‘go to the office.

2. Liscio

One good thing about this tax season is the web-based communication and document sharing solution Liscio. Although I do still need to get some of my clients transitioned to it, Liscio was a big win this year.

With Liscio, I can communicate with my clients and make requests to them to send me missing documents and have them upload documents to me. Having all the communication within Liscio as opposed to email or text makes it easy for me and my clients to know where things stand.

Liscio also assisted when I had taxpayers have document signing issues within my tax software. With quite a few, I had issues with them passing the verification part of the built-in document signing tool. Since Liscio also has a signature request element, I was able to use it to get documents signed that were troublesome in other tools.

Finally, for my business clients, I use Liscio throughout the year. I have ‘tasks’ assigned to the clients I have on Liscio requesting them to upload documents like bank statements. The best part is that it is automated and acts as my assistant. Liscio made getting work done throughout the year much easier. The ultimate outcome is that it opened the door to advisory meetings during the year since their books were more real-time than ever before. This has been an ongoing process and will continue to improve.

3. Outsourcing

My biggest GOOD for this past tax season was that I outsourced work throughout the year to get work done for business clients. I used the shared services element of the Woodard Advanced Bookkeeping System throughout 2021. Because that team completed their assigned work when needed, I was able to keep my work done throughout the year. In fact, books for my business clients were finished by mid-January so I was ready to start doing tax returns for most of my clients!

My goal going into the season was to have 90% of all business returns prepared and filed by the due date. In the end, only 75% were filed by the due date, but I identified the reason why it was less than expected.

The 25% of my clients who needed an extension are outside of my preferred process. These are clients who are either still on their own QuickBooks desktop files or some other proprietary general ledger software. The ones following the process I want are the ones with timely filed returns and already prepared for 2022 and the 2023 tax filing season.

Now that I really see the benefit of requiring clients to follow my processes and use my technology, it is time to listen to my colleague, Patricia Hendrix. In "The Ideal Busines" course she teaches, she discusses the ideal client, emphasizing how we may need to show some of our clients who do not adhere to our methodology and process out the back door.

Another benefit to having such a high percentage of my business tax returns filed on time was that I was able to take on and complete more individual returns. This was a true win/win as many of those taxpayers are also business owners.

The ultimate outcome of the 2022 tax filing season

Let me tie this all up in a bow.

The good things

Creating a "mobile" office,
Using Liscio to improve communication and processes, and
Having the shared services outsourcing team keep all of my bookkeeping current leading into the tax season

Led to