#TechTips: Tax Return Workpapers — A Better Way

By Jonathan Rivlin, CPA

Everyone seems to love a good tech prognosticator.  The web is chock full of breathless articles touting how great things will be in 2, 5, 10, 20, 50 years from now – better living through technology.  Does anyone ever go back and read some of those predictions from years past?

I remember how the 90’s were supposed to be when we went paperless.  We even got the Electronic Signatures in Global and National Commerce Act (ESIGN – ahh the government and their acronyms) –  though this came in mid 2000.

It was a brave new world back in the 90’s.  My cathode ray tube based monitor bathed me and my 13 column paper in a sickly glow while the cooling fan from my 33 Mhz tower blazed away like a jet engine.  (As an aside, why did computers back then come with a “speed boost” button; who would ever choose for their computer to run slow?)

In all seriousness, we may never be 100% paperless, but with the tech we’ll be profiling in this column, we can get pretty darn close.  But that’s not the main reason for considering this particular tech.

In this column, we’ll be profiling 2 apps called “SurePrep” and “TaxCaddy”.

SurePrep offers a suite of tools for tax return preparation, among other things.  Together with their client facing app called “TaxCaddy”, we preparers can dispense with sending out those bulky tax organizers (that – if they come back at all – are never filled out, or even opened).

Clients download TaxCaddy to their smart phone or other device.  They can then either drag and drop PDFs (and a few other file types) from the computer direct to their TaxCaddy profile, or they can snap a picture with their mobile device.

As with my previous column on Xero (if you haven’t signed up yet, you’re missing out!), we can’t talk about SurePrep and TaxCaddy without mentioning Intuit and their related offering, Intuit Link.

We used the Link for the 2017 tax season.  Our clients HATED it.  We HATED it.  It seemed designed to cause us to make mistakes.  I remember distinctly one return from a client that insisted on using paper that year.  He actually requested a full organizer print out bless his heart.  When I worked through his tax organizer and matched them up with the various W-2’s, 1099’s, etc, I actually cried because it was painfully apparent just how difficult Intuit Link was to deal with – from the client’s side through to the reviewer’s side.

After tax season 2017 came mercifully to a close, we researched other options.  That’s when we discovered SurePrep and TaxCaddy.

We rolled this out for the 2018 tax season and it was a much better experience – for us and our clients.

Internally, we used SurePrep to replace our paper workpapers.  SurePrep made documentation and annotation easier.  AND, the killer feature here is that when the client uploads their docs through TaxCaddy, those docs get converted into an image that can then be seemlessly entered into your tax software.

Let me say this again – you don’t have to enter your clients’ W-2’s and 1099’s.  The client takes a picture, it goes into the TaxCaddy/SurePrep app, and then you click a button and it goes into your tax software.

As in my previous column on Xero (seriously, sign up for it and get your life back!), you can’t walk into the future with rose colored glasses.  Nothing is perfect; there is a learning curve.

But I will tell you this:  I had some returns that would easily take me 8+ hours to work through.  With this new software, it took me 3 hours.  In tax seasons past, we’d hire a seasonal person to help us with data entry; we didn’t need to do that this year.  The software isn’t cheap, but dollar for dollar it costs less than a staff and it doesn’t get tired or make mistakes*.

I don’t want to oversell you here; you’ll still need to check that the data comes through to your tax software correctly.  But any errors we discovered were on the Intuit side (we use Lacerte in our firm).  Even with that said, the data bridge not only saves time, it saves your body; less eye strain, wrist strain, finger strain – over the course of a brutal tax season, this adds up!

Review is easier too; all the source docs and preparer’s notes are in one place.  The reviewer can focus on theory and less on data.

Completion and delivery of the return is easier too.  No more print, assembly, and a call for pickup or mailing.  You make a PDF of the return and post it to the client’s TaxCaddy profile.  Our secure portal gets two files, the final return PDF and the SurePrep file as a PDF.  Think about what is missing here:  envelopes, toner, postage, admin staff time, paper – headache.

The financial case for these apps, SurePrep/TaxCaddy, Xero, and the like are that they allow small firms (which many taxpayers prefer) to punch above their weight.  We are a small firm, but we can handle a lot more work – a lot more complex work – without exploding our staff and overhead – just by using these apps.

March 7, 2019

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