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Tax Preparation

Tax Software to Help Prepare for the Next Tax Season

Strategies and tips to help you prepare for the next tax season


This past tax season was one for the record books. Tax professionals strove valiantly to match pace with constant business and regulatory changes while adopting new remote work and collaboration processes on the fly.

Now that you’ve successfully closed the books on a difficult tax year, it’s time to prepare for the next tax season and a successful year-end close. With the right preparation, you’ll identify any roadblocks that need to be overcome and any errors that should be fixed. Your commitment to preparation and thoughtful management of tax deadlines should make tax season go much more smoothly next time.

Preplan the tax season with your internal teams

As you prepare for the new tax year, you’ll want to conduct a review of last year’s tax close with your internal teams. The time frame for this preplanning optimally begins in July, when you’ll establish and inform your team and begin identifying potential roadblocks. Follow these steps to complete the preplanning phase:

  1. Identify all users. Finalize your tax team for the upcoming year. Set up new team members with user access privileges for your tax software, while removing those who have moved on. In addition, you’ll probably need to train new team members on your tax software and digital workflow, including data mapping, reconciliations, and reporting.
  2. Conduct a post-mortem. What worked well last year? What didn’t? Are there easy improvements you can make? Zero in on areas such as excessive manual data entry, tax form overrides, and missed regulatory changes. That way your team will avoid making the same mistakes next year.

Plan tax processes for the year-end close

October is a great month to pick up the pace with planning. You can set key deadlines, validate your users, test your processes, and ensure that your data is clean. With fully tested processes and clean data, you can ensure that your reports are clean and your tax filing goes smoothly. To prepare for the testing of your processes, complete these steps:

  1. Establish year-end close deadlines. Now is the time to strategize and set all target dates for the year-end close. Create a timeline for the peak tax reporting season that includes data submission and filing deadlines for original and corrected tax returns, as well as other key deliverables. Tax reporting workflow software can help you communicate these processes and deadlines clearly across your team.
  2. Finalize all users. Confirm all tax software users, set them up properly, and review their security profiles. Follow best practices and grant the least privilege required for users to complete their tax duties. Authorized users should then log in to make sure they can review data, upload files, and conduct other digital workflow processes. These double-checks help ensure that you’ll avoid unnecessary IT issues during the heat of tax season that can slow or compromise your progress.
  3. Review and make changes. Consult with your team on any business changes or other changes and make sure they’re reflected in your tax software. For example, you may need to update source files, fine-tune file layouts, or add new form types. In addition, if you use custom forms, you’ll want to review them for accuracy.

Test run your tax processes

Now that you’ve set a solid foundation, you’ll want to test your processes to make sure they function as intended when tax deadlines draw near. Follow these steps to perform your test run:

  1. Rollover relevant data. Before testing, rollover any data that is still relevant in the new tax year. This includes code translations and maps (be sure to roll over code translations first). Note that you should only roll over the maps you will actually use, to avoid creating unnecessary complexity around managing mapping tables.
  2. Update your preferences. Update or add information such as statement messages, payer information, information about deliverables, custom documents, and any file transfer protocols. Verifying addresses is particularly important this year because so many businesses have moved or shuttered offices due to the pandemic.
  3. Transfer data files. To prepare for your test run, transfer and import your data files and then check all of your mapping coordinates, comparing default values against sample files and making any necessary changes. Be sure to sample data for every single map and every single position in each of your data files.
  4. Review reconciliation reports. After importing your files, you should review reconciliation reports to validate your data, no matter how clean you think that data is. Forms can fail due to missing taxpayer identification number (TIN) data, ZIP codes, and other information. In addition, formatting requirements, such as those required by IRS Form 1042-S, may cause errors. Communicate your findings of common errors back to your team so that contributors don’t make them at tax time.
  5. Do a final test run. After you’ve cleaned up all errors, do a final test run to ensure that all forms will be accepted. You’ll want to do a draft print job on a sample of your forms to make sure TIN data is masked, that other information is presented correctly and that forms include all relevant information, including inserts.

With this advanced preparation and the right tax software, resources, and support from a trusted partner, you’ll be able to build on the lessons learned from an extraordinary tax year and be ready for a smooth year-end close next season.

Expedite your tax preparation with tax software

Preparing your tax calendar in advance for the upcoming tax season is an essential process that can be expedited with the right tax technology. While last year’s tax season was a trial by fire, it also provided a compelling case for using tax software from an experienced, trusted vendor to help you standardize and communicate critical processes. Tools such as Thomson Reuters ONESOURCE™ Workflow Manager include data management and workflow management software that can help you avoid last-minute issues that might result in filing delays or errors.

Be as prepared as you can be. Learn how you can optimize your entire tax process with a trusted data management software for corporate tax businesses.


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