Making the most of the May 17 tax deadline extension

If your firm is like most, you know all about the long hours and stress leading up to the tax deadline in a typical year. That is why so many firms don’t consider doing tax planning during these pivotal months. However, with the IRS recently extending the tax deadline to May 17, you now have 32 extra days. Could you conceivably fit some tax planning into your schedule, even if you’ve never done tax planning before? Let’s consider it.

Tax season stress

Taking on an additional advisory service such as tax planning is a big step, whether in tax season or not. It requires accountants to make a major shift in the way they work with their clients, one that takes them from being mostly reactive, past-looking tax preparers into proactive, forward-looking advisors. This can be a challenge at any time of the year, so why should accountants consider adding this to their activities during their busiest time?

Tax planning benefits

When adding tax planning to your service menu, you will see extra revenue opportunities — especially during tax season.

Tax preparation is widely considered to be like compliance work: low-priced and past-oriented. On the other hand, tax planning is considered to be an advisory service that is outcome-focused with a high ROI — which allows for higher prices and drives greater profitability. If a client is willing to pay $1,200 for the preparation of a business return, wouldn’t they be willing to pay $2,000 per quarter if you could perform proactive tax planning and save them $22,000 annually? The answer, we’ve found, is yes — most of the time.

But why would a tax professional want to take this on during tax season, the busiest time of the year? Pay close attention to this: Offering tax planning during tax season presents a unique upsell opportunity to existing clients who are already thinking about how much money they are going to owe. Their tax returns are at the top of their mind so it’s easy for firms to repackage these prep services by adding components such as tax planning as a one-time or quarterly recurring service.

In addition, firms that only do traditional tax preparation leading up to the May 17 deadline this year will be missing out on giving their clients optimum value. In many cases, you’ll find you can save clients tens to hundreds of thousands of dollars in taxes in 2021 if you do tax planning this year. As long as they are saving more than what they’re paying you, you are literally giving them money back!

Is tax planning realistic before May 17?

With technology accelerating, the whole tax planning process is advancing at lightning speed if you have the right software, such as being able to automatically calculate over 60 tax-planning strategies across multiple entities instantly. Without tax-planning software, it is less realistic to tax plan in this window of time, but still doable to a certain extent.

The main problem with tax planning without using specialized software that automates the process is that pulling everything together manually takes too long. With that said, let’s discuss both options, starting with how to tax plan before the May 17 deadline without the help of any technology.