A Dozen Ways to Add New Revenue with Tax Prep Follow-Ups | CPA Trendlines


Plus 4 “how much?” questions to ponder.

By Ed Mendlowitz
How to Build a Stronger Tax Practice

As you see each tax prep client you should keep a list of additional services you can offer them. Also, continue this list when you review each return.

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I prepare a list of follow-up items during a tax season on my Microsoft Outlook task list. These items are entered as the issue or idea arises. It is simple, quick and very satisfying. The next job will be to make the time to follow up with the client, and do your “good deed.”

Tax returns present a window into a client’s total financial affairs, and many of their other concerns also. For instance, discussing a client’s interest and dividend 1099s can lead to asking why they have certain investments or certificates of deposit. An obvious reason is to tell them about tax-sheltered ways to invest such as tax-free bonds or annuities, or why corporate dividends might be something to consider. Other issues that can be developed are the purpose for the investing and asset accumulation. Is the client concerned about their children’s educational funding, or retiring, or are they saving to buy a business? Each of these is an opportunity to follow up (after tax season) with inquiries of how you can help and to get the client to come in for an initial consultation.

Another area of interest that can be uncovered is if the client has young children or parents they are supporting. Have they made adequate arrangements in their will? Do they even have a current will? Is their life insurance coverage suitable based on the reliance others place on them? Estate taxes may or may not be an issue, but suitable financial arrangements for a guardian or for relatives should be considered. Who is better qualified than you – their accountant – to advise them on how to get it done?

Yet another area is the designation of beneficiary forms for IRAs, 401(k)s and pension plans. How they are filled out will affect the taxation and cash flow of those funds. Also, the client might need someone to tie together the asset allocation arrangements of those accounts with their overall financial plan.

Other issues include:

  1. Adjusting W-4 forms for withholding, or filing estimated taxes
  2. Considering business qualified retirement plans and possibly one-person 401(k)s
  3. The timing of exercising stock options, and how to ask an employer for stock options
  4. The need for serious estate planning such as family partnerships and grantor trusts
  5. Sophisticated charitable giving arrangements including donating appreciated stock
  6. Reporting and withholding for household employees
  7. The timing of the redemption of U.S. savings bonds
  8. The possible effect of the alternative minimum tax for the current year
  9. Transferring parents’ residences to their children or why notto
  10. The tax effects of a contemplated marital separation

Call your clients after tax season and set up that consultation! Perhaps even walk the client through a tax return item by item (sometime in the summer) and outline what it tells you about the client’s needs and potential future services. Following up is a key element to introducing clients to additional services.

As accountants we sometimes like to quantify things. Here are four ”how much”  questions you can put numbers to:

  1. How much potential billing do you think is represented by the above listing?
  2. How much benefit in additional client service and good will is represented?
  3. How much of this work appears to be able to be done in “slow” periods, or even by a summer intern?
  4. How much effort did it take to construct this list?

Use the summer to meet with some of your clients with more complicated tax returns to (1) review it with them so they understand their situation better, (2) initiate a tax planning discussion that could have the potential to save them taxes in the future and (3) try to uncover issues that are on their minds that have financial planning implications.



Edward Mendlowitz, CPA, ABV, PFS, is a partner in Withum Smith + Brown’s New Brunswick, NJ, office and has over 40 years of public accounting experience.

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