10 Things You Can Do Now to Have a Great Tax Season

Many tax practitioners focus on improving their efficiency during tax season, but there are plenty of things they can do in advance to ensure success from January to April
Best practices and strategies that tax practitioners can start putting in place now are:

• Make sure you have good scanners. He recommends the Fujitsu 6130, which scans 50 pages a minute, duplex, and offers despeckling and decrumpling, among other features. “You’re going to scan at the front end,” he said. “The days of having people with lots of stuff to key off, those days are over with. We scan everything at the front end.”
• Get multiple monitors. “Go home tomorrow and buy another monitor. It’s ridiculous to have just one monitor. You’ve got to have at least two,” he said, noting that at his office, staff have three, and they’re contemplating moving to four, while a McKinsey study says that knowledge workers are most productive when they have six. He also described a portable monitor that can hook into the USB port on most laptops.
• Software: scan, organize, populate. Make sure you’re using tools that do these things. “Clients bring in their stuff -- that’s the polite word for it -- and normally this ‘stuff’ would go to a tax preparer and they’d sort it and move it around and copy it and put yellow stickies on it and highlight it,” Frederiksen said. “No more -- now it goes to the administrative person who does the scanning. He counts the number of sheets, runs them through the scanner and makes sure the scanner sees the same number of pages. Then we upload it to [a service like 1040 Scan or GruntWorx]. They put all the documents in the correct order so they follow the organizer.” When the file is returned approximately 10 minutes later, the practitioner takes care of the miscellaneous items that the system can’t recognize. The system also takes the numbers from the source documents and populates them in the tax return. “We find it populates approximately 60 percent of the return,” he said. The services are generally priced per return.
• Send direct mail to homeowners. Frederiksen said that he gets most of his clients from direct mail. He buys lists of all the new homeowners in his area; a number of companies provide them, but his firm uses Homeowners Marketing Services. He generally sends as many as five letters -- an introductory letter, a letter on December 1 offering a free half-hour consultation, a letter on February 1 offering a 10 percent discount if they come in before February 15, a similar letter on March 1, and a final postcard on April 1. “It’s the best two weeks in the year to get new clients,” he said.
• Thank-you letters. These should be sent out within five days of completing a client’s return, and ask for referrals. The trick is to write them out now, before January, so they’re ready to mail during tax season, and also to include at least two business cards for the client to give out to friends and family: “You’ve got to make it easy for people to refer business to you,” he said.
• Tax organizers. “We are big believers in tax organizers as a marketing device,” Frederiksen said. His firm sends full electronic organizers from the tax prep software, but it has also created a condensed, four-page organizer, which often helps drive referrals. Among other things, they printed up 5,000 and had them inserted in a local paper on February 1. “It wasn’t a stampede of new clients, but it certainly paid for itself, and it helped in terms of our branding,” he said.
• Create an audit prepayments and correspondence program. As an add-on at 10 percent of your fee, or $100, offer to cover any audit, and to deal with nuisance mail. Very few clients will get audited, so it’s worth the risk. He also recommends offering new clients a guarantee on all prior returns for $350. “What are my odds that they’re going to get audited?” he asked.
• Preschedule mail-ins. Tell clients to send information in by February 25, even if they don’t have everything ready.
• Preschedule appointments. “You can spend a huge amount of time during tax season messing around with appointments. You end up with all of this phone tag going back and forth,” he said. Clients should be prescheduled, with a postcard that includes a map of your location. “They want to know how to find you, and what to do with their car when they get there,” Frederiksen said. You should have someone on your staff follow up the  week before and the day before.
• Expand your capacity. Because of the shortage of skilled preparers, Frederiksen said that there will only about a third of the tax preparers available that the industry needs, so practitioners may want to start exploring outsourcing returns to India and locally through firms like Xpitax and SurePrep.

source: http://www.accountingtoday.com

A guide to expenses you can claim

As a contractor it can be a bit of a minefield trying to figure out what you can and can’t
legitimately claim as expenses. For instance, if you’re buying a new all-singing-alldancing
laptop, is it pushing the mark to claim for that?
This guide will help you identify expenses you’re entitled to claim for.
Here’s an idea of some of the legitimate and above-board expense claims we’ll happily help you with:
Some general rules on expense claims:
1. All claims for expenses should be incurred wholly, exclusively and necessarily in performing
your business duties.
2. You should not claim any travel and subsistence expenses for any one place you have
worked, or know you will work, for more than 2 years.
3. Receipts for all expenses should be kept for a minimum of 6 years to provide evidence of
expense claims in case of HMRC investigation.

Business mileage (use of your personal car)
You can currently claim 45p per mile for the first 10,000 business miles you do in your car each year
and then 25p per mile after that. This mileage includes travelling to and from temporary locations and
between different sites. Of course, you need to get valid VAT receipts for fuel and these must be
kept to support your claim.
Subsistence
You’ve got to eat! So, while working at a temporary location, you can claim any reasonable meal and
drink costs supported by valid receipts. So if you buy a sandwich and coffee for lunch….keep the
receipts!
Accommodation
There are several categories for submitting accommodation costs, here’s how they all stack up:
All accommodation (hotels and B&Bs) must be accompanied by an original receipt.
If you’re claiming accommodation rental costs, your rental agreement must be the original (in
the name of the business), signed copy and meet HMRC Dual Purpose rules, which means
that you are already maintaining a property and are renting a 2nd property for the purpose of
your contract.
You may be able to make a claim for staying with friends of family whilst at a temporary work
place.
Parking charges
Parking can be claimed as long as an original receipt detailing the date and cost is available for each
amount claimed.
Rail, bus, taxi and air travelFare costs to and from your home and temporary place of work can be claimed where receipts are
provided. For low cost flights, both original tickets and online receipts are acceptable.
Training and tuition
Any training or tuition to do with your current trade can be claimed. Training is treated like any other
deductible business expense; it must be ‘wholly, exclusively and necessarily’ in the performance of
duties and related to income. If the training is not linked to existing income, then it cannot be
treated as a deductible expense through your limited company.
Manuals and text books
A reasonable amount may be claimed for the cost of manuals and text books required for business
purposes - receipts required.
Eyesight testsAn eye test may be claimed as long as a receipt is provided. The cost of spectacles may be claimed if
they are prescribed for VDU use only. This will need to be confirmed on the receipt from the optician.
Computers and other office equipment
The costs of hardware, software and other office equipment essential to your business can be
claimed. There’s no limit to the amount that can be claimed.
Postage
Anything you need to post to us here at ClearSky or any business related post can be claimed for,
again original receipts must be provided.
Office consumables and stationery
Any office consumables (printer ink, pens etc) and stationery you use for business may be claimed.
This total cost must be for a reasonable amount and you’ll need original receipts to validate your
claim.
Telephone
Itemised business calls from home or a personal mobile are fully claimable, while unfortunately
private calls or line rental costs are not. To claim business calls a copy of your itemised telephone bill
must be kept. Internet / ADSL subscriptions cannot be claimed.
If the telephone/internet contract is taken in the company name the full cost of the line rental/call
charges can be claimed.
Associated travel costsRoad and bridge tolls, tunnel fares and congestion charges incurred while on business may be
claimed. Original receipts are required for all items except toll fees. Speeding, parking or clamping
fines cannot be claimed.
Advertising/MarketingCosts of advertising your business is an allowable expense, so for example online search engine
listings, telephone directories or in some cases even sponsorship of a local sports team.
Childcare
Up to £55 per week, per employee, paid to a registered childminder can be claimed through your
company. This should be paid from the company bank account. This can be dependent on the level
of your income, you may need to speak to your Personal Accountant for specific claims.
Bicycle
You could claim for the cost of a bicycle through the “cycle to work” scheme. You may even be able
to claim a mileage expense for the journeys to a temporary workplace.
Donations
Donations made to a registered, HMRC approved, charity are allowable.
Use of home as office expenses
In 2012 a fixed rate of £4 a week was announced as an acceptable flat rate claim for general costs
associated with the use of home, and it was confirmed that no detailed expense claim need be
prepared to justify such an amount. Claim amounts above this may be able to be made – however
should be supported by sufficient evidence.
Pension contributions
Pension contributions made by an employer on behalf of its employees are an allowable expense. If
you would like to discuss setting up an employers pension scheme through your limited company
please contact ClearSky Wealth Management on 0845 060 8800.
Staff entertaining
The cost of an annual staff function can be claimed through your company. This should be supported
by receipts and it is important that the receipts for this expense do not exceed £150 per employee.
Life Insurance
You can save tax by paying for some life insurance policies through your limited company.