How to Get Your Company Tax Returns Done Quickly and Painlessly

Some of you have expressed concern about the time table for my recovery from my hamstring strain.  Or maybe that was concern for RGIII's recovery from knee surgery.  I also hold Dr. Andrews responsible for my injury.  The last game of the year, he had every opportunity to tell me not to run to the refrigerator for the last beer of the regular season.  I was in no physical condition to hurdle the dog and elude my mother-in-law as I raced against the game clock.  I also hold Mike Shanahan responsible.  He had a time out available.  I'm keeping that in mind while I consider my free agent beer drinking options.  At least I didn't spill the beer.

There are a few easy ways to make certain your CPA makes the March 15th corporate tax deadline.  First, understand that your company's tax return is not the only return your CPA is preparing during tax season.  You deserve good, but not exclusive service.  If you have a CPA, who's not busy during tax season, you have a newbie or somebody who doesn't have much business.  That's bad.  I know what my level of expertise was thirty years ago.  Today, I wouldn't hire the thirty year younger me.  If a CPA has few clients, the business world has expressed its opinion on his expertise.

The second thing to keep in mind if you want your corporate tax returns prepared by the deadline is that not all of a CPA's corporate clients can show up on March 14th and expect to get their corporate returns done by the deadline.  In fact, they can't all show up on March 1st.  Most established firms have deadlines the last week in February.  Some cut off on February 15th.

If your CPA's deadline is February 28th and you get your books to him right before that date, you will not get the attention and service you'll get in early February.  In January and early February, your CPA has the time to consider different tax treatments and what if scenarios like pension contributions and switching your accounting basis.  He can spend time on research.  By the end of February, his focus is on getting returns out the door.  If you want a meeting to discuss some aspect of your corporate returns, forget about it.  There just isn't time in March.

One last item to consider regarding your CPA is that if your return isn't complete by the March 15th deadline, it likely won't be completed until after the April 15th personal tax deadline.  On March 16th, CPA firms switch from focusing on corporate tax returns to personal tax returns and the April 15th deadline.  From March 16th through the end of March, I am scheduled for ten to fifteen personal tax appointments every week day.  That doesn't leave time for corporate tax return preparation.

The switch to personal tax return preparation is really bad news for S corporation owners.  It means that if you miss the deadline for your corporate tax returns, you will likely miss the personal tax deadline as well.  The difference between having your books ready in late February and early March is the difference between having your personal tax returns done by March or waiting until May or June.  That should motivate you to motivate your bookkeeper.

Your books should be closed for the prior year by the first week in February.  Publicly held companies are required to have financial information to the S.E.C. within a month.  If billion dollar companies can do it, you can too.

Step one in preparing for your 2013 year end starts now. Your bookkeeper doesn't have to wait until next January to get serious about getting caught up.  Establish a standard monthly schedule of having the prior month's books completed by the 15th of the next month.  Require your bookkeeper to produce monthly balance sheets and income statements by that time each month.

For each year, twelve months of bookkeeping has to be done.  There is no reason to wait until the last quarter of the year to get started.  There are only two possible reasons your bookkeeper can't meet this schedule.  One, she may need more staffing resources.  Second, you have the wrong bookkeeper.  Your CPA will be happy to help you make this determination in the summer, before you fall behind.

There are two common reasons bookkeepers fall behind.  First, they don't work diligently enough in the first three quarters of the year.  Don't ask me what they do for the first nine months of the year, but the evidence suggests not much in a lot of cases.

Second, bookkeepers take time off during November, December, and January.  The answer to this is "no."  The bookkeeping profession, like the CPA profession, has periods where vacations aren't allowed.  Your bookkeeper will tell you it stinks that she can't have extra time off during Thanksgiving and Christmas to visit her dying Aunt Irma, but she chose her profession.  You didn't choose for her.  Don't pull the plug on Aunt Irma until the books are closed for the year.  She'll wait.  What else does she have to look forward to?

Wil Ferrell's character in the movie "Old School" screams for his meatloaf and comments about his mother in the kitchen, "I don't know what she does back there."  If you feel that way about your bookkeeper, it's time for a change.

Thanks for reading!  For real tax and accounting advice, please visit the main S&K web site at www.skcpas.com.  Also, please like the "How to Screw Up Your Small Business" Facebook page.  I post tips and snarkiness a couple times per day.