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Tax Preparation Outsourcing May Be the Right Alternative

By Amitaabh Saboo Subscribe to RSS | February 1st 2012 | Views:

Everyone must file tax returns, whether, we wish to or not. Tax professionals are inundated with tax return preparation during the rush tax season as most taxpayers try to avoid paying penalties or the related high interest fees.

One alternative is tax preparation outsourcing. Outsourcing is not an event that disappears and tax return preparation outsourcing is designed to help professionals such as CPAs meet the higher customer demand. It can be a more cost effective alternative when compared to the cost of hiring a CPA. The main reasons for outsourcing would be to save money and to improve the process, and tax preparation outsourcing may help to accomplish both objectives.

Before beginning any outsourcing project, consider, the purpose. If you are looking at saving money, you will need to know what types of costs area associated with outsourcing. You should also be realistic about the expected savings.

Another reason why companies turn to outsourcing is to improve a service, regardless of the cost. Some may also believe that achieving cost savings along with improving the service is entirely possible.

The decision to use Tax preparation outsourcing can be an important one. In addition to having the reasons, you need to understand the process and the impact that it can have on your organization. You should also have a complete understanding of your current costs in order to determine the validity of the providers' cost. You should also understand the financial details of the prices proposed.

Most importantly, in order to be successful with the tax preparation outsourcing process, you should ensure that you choose the right provider. Understanding the process is also important.

The tax preparation outsourcing process can be very simple.

A .pdf file is generated when the client documents, including W-2s, 1099s and K-1s, are scanned by the CPA firm.. The documents are sent, along with the prior-year tax file to the outsourcer, who then uploads all scanned documents and relevant taxation records to a U.S. data centre. The documents can then be easily accessed, and organized into a Web-based file to prepare the returns.

One of the biggest concerns in the internet age still is security, especially where financial data is involved. The tax preparation outsourcing process should have some measures in place to safeguard customer identity and financial data.

There are some concerns about security that can be addressed before using an outsourcer

Some people may not be comfortable about having personal information, including their Social Security and bank account numbers, being published electronically 7,000 miles away.

Before contracting with a provider, you should be reassured, by finding out how the employees are monitored or screened, or what regulations are applied in the case of security breaches. You should find out how any disputes are resolved.

An additional benefit of outsourcing tax preparation is that it can allow some firms to handle more clients and it can result in reduces labour costs. You should be certain that the risks are mitigated and remember that the outsourcing relationship must still be managed.

Amitaabh Saboo - About Author: is a #1 selling tax outsourcing preparation firm for American CPAs. It provides the highest level of Accounting and Tax Preparation expertise and access to the latest technologies.

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