Home Blog Real Estate Business

Confessions of a CPA: 3 Year-End Tasks I Wish All of My Clients Would Perform

Brandon Hall
5 min read
Confessions of a CPA: 3 Year-End Tasks I Wish All of My Clients Would Perform

As 2015 is comes to an end, it’s important that you start taking steps now to organize your documents and have your books ready for your CPA’s review. Being organized will make your CPA’s life easier, and ultimately save you money by avoiding extra preparation fees that often come with disorganized books and documents.

There are three steps you can take to organize your tax information and make your CPA’s life much easier:

  1. Proactively speak to your CPA prior to year-end about any changes in your life that may affect your tax situation so that your CPA can provide you with tax planning if necessary.
  2. Consolidate and organize your books from your rental or business activities and sum up the various categories of income and expenses.
  3. Ask when your CPA will send out a tax organizer and make sure you complete all of it.

Proactively Speak to Your CPA

Though tax geniuses, we CPA folks are not wizards and cannot read your mind. While we tend to check in every once in a while, we won’t know that you are getting a huge bonus or that you bought a new property unless you tell us so.

Do you have your CPA’s cell phone number? If not, you should get it. All it takes is a simple text: “Hey Brandon, it’s Dave – just wanted to let you know I closed on a 4-unit yesterday. Anything I should know tax-wise?” If Dave had sent me that text, Dave would be getting a call from me because there are indeed many things we need to discuss and that Dave needs to be aware of that will affect his tax position.

Additionally, proactively speaking with us allows us to update our client files with current notes and will give us a better idea of your overall situation. This allows us to provide holistic, high quality advice, which often leads to more savings for you!


Related: A CPA Explores: “How Much Income Should I Allocate to Taxes as a Business Owner?”

Year-end communication and tax planning is critical, yet it amazes me that there are some people who refuse to pay their CPA’s hourly rate for a short phone conversation discussing high-level tax planning advice. That conversation may cost you $150, but the advice you receive may save you thousands in taxes. Trust me, we can quickly see where a client is missing deductions, but we can only deliver that information to you if we know about it.

We want to be your trusted advisor, and we want to help you reduce your overall tax liability. You aren’t paying a CPA for their tax prep services; you are paying a CPA for their brain – and that brain will save you thousands if you use it correctly. So call your CPA and initiate those conversations sooner rather than later. It becomes much harder and costlier to retroactively make changes.

Consolidate and Organize Your Books

The final version of your books may not be ready until the first week or two in January, but you can absolutely go ahead and start reviewing your books to get a good idea of where your rental or business activities stand for the year. Are you going to show income? If so, how much? Is it worth a talk with your CPA to see if there are any tax strategies you can implement to reduce your income? If you are going to show a loss, will you benefit from it? Your CPA will know.

Gather receipts to support various expenses. CPAs will generally want to review big ticket items like repairs and improvements, as well as grey matters like gifts, meals, and entertainment. These are common areas that are often misclassified or overstated, so we want to make sure that in the event of an audit, you are well protected and we can easily defend your tax position.

Ask your CPA how they want the information presented to them when you hand everything off. Does your CPA want to see a consolidated Profit & Loss (P&L)? Do they want to see everything broken out by class (that’s a QuickBooks term)? For those of you using Excel or the shoebox method, how does your CPA want things summed up, what categories should you be using, and will it cost you extra for year-end reconciliation?

Generally speaking, you should have all of the hard documentation you need to complete your books by January 30th. I’m talking 1099s, 1098s, W2s, etc. It’s important to review this information prior to sending it to your CPA to make sure your books are correctly stated.

Use the Tax Organizer

Generally, CPAs will send their clients some form of a tax organizer. The tax organizer serves two purposes: (1) it reminds you about different tax items that may have slipped your mind and allows you to send a complete set of documentation to your CPA, and (2) it allows the CPA to minimize liability from malpractice as we have a duty to ask certain, relevant questions.

Related: How to Prove Tax Deductions as an Investor: A Guide to Tracking Receipts

The tax organizer may seem daunting (some are around 50 pages), but hopefully your CPA has tailored it to your situation to make it less so. It is in your best interest to fill it out to the best of your ability. It is similar to filling out fields on Turbo Tax, except now you have a human brain reading your inputs and finding all the loopholes you can possibly find. And trust me on this, while machines are generally more efficient and smarter than the human brain, Turbo Tax will be no match for a good CPA.


The tax organizer is also to help make sure you send a complete packet of information and documents to your CPA. It relieves the CPA of constant back and forth communications and will help you avoid an organizational charge. Yes, CPAs will tack on a fee for incomplete information packets due to a tax organizer that was not 100 percent filled out.

The tax organizer will generally be made available to clients within the first couple weeks of January. Make sure your engagement letter with your CPA spells out the rules surrounding the tax organizer. For instance, does your CPA require your use the tax organizer and fill it out completely? Most CPAs will have verbiage in their engagement letters that states the engagement will not begin until the tax organizer is 100 percent complete and returned to the CPA.


It’s important to speak with your CPA proactively and regularly. After all, we truly want to be your trusted advisor and proactive conversations help with this. You should also begin organizing your books to determine if you need to reduce income or are eligible to take losses. Lastly, make sure you inquire about the tax organizer and when you should start sending documents to your CPA.

Year-end is right around the corner. Don’t let taxes stress you out over the holidays. Get organized today!

Disclaimer: This article does not constitute legal advice. As always, consult your CPA or accountant before implementing any tax strategies to ensure that these methods fit with your particular situation.

What steps have you taken to prepare for tax season? Any questions about the best ways to get organized?

Leave your comments below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.