When Outsourcing Individual Tax Return Filings Know the IRC Section 7216 Requirements

“Cristopher Carmona, CPA, speaks about his bookkeeping outsourcing experience with QXAS. He emphasizes on how efficiently the team set up everything remotely and executed all functions, without journal entry definition any hiccups.” We offer easily scalable services that are optimized to manage multiple projects simultaneously. This is what drove us to take another look at outsourcing to an overseas provider.

  • You must know the advantages and disadvantages of outsourcing tax preparation services to make an informed decision.
  • Statistics pointed out that the U.S. government collected $4.05 trillion in revenue from taxes in 2021.
  • This will result in significant cost savings in the tax season and boost profitability.

Clearly defining the expertise you need to add makes it easier to choose an outsourcing engagement model that matches your specific staffing needs. You have a wide range of outsourcing models to choose from, including those based on locations (onshore, nearshore, offshore, and onsite) and pricing. A business that clearly defines its outsourcing goals is already ahead of the game. Accounting firms should outline their outsourcing objectives step-by-step to zero in on a suitable staff model. Defining clear outsourcing goals is also an opportunity to take stock of your firm’s actual outsourcing requirements.

To achieve affordable scalability and tremendous cost savings, and save more than 50%, outsource tax preparation to QXAS. Outsourcing is the practice of hiring a third party to handle work that would otherwise be done internally. When outsourcing income tax preparation, your firm flexes the preparation work to an external tax professional, who sends back a fully prepared 1040 return. A good outsourcing service offers a smooth, standardized workflow that makes their preparers feel like an extension of your own staff.

Training & support

In post-tax-season surveys, we hear from existing clients that the work done by our outsourcing staff is the same (or better) quality as their in-house staff. However, not every outsourcing provider has the same stringent education, experience, and training requirements. Xpitax® has maintained SOC2 certifications with significant investments in building state of the art secure infrastructure for our outsourcing operations.

  • Clients expect that the firm has done its due diligence during the vetting process and choose a tax outsourcing provider who will protect their information against external and internal risks.
  • However, not every CPA firm deciding to take the outsourcing path knows all the benefits of outsourced tax preparation services.
  • On-time work delivery and exceptional support are key traits of an ideal outsourcing service provider.
  • We make sure the Pros attached to your account are capable of handling your specific needs.

If you are looking to partner with the best tax preparation outsourcing company, we are your perfect choice. But you can still look for other service providers who might offer the advantages mentioned above. But the chances are that you might not find anyone better than us to help you with your tax prep requirements. Tax preparation outsourcing can give CPA firms a massive advantage in staying ahead of their competitors. Irrespective of your challenges- whether you are understaffed, your staff lacks the skills & expertise, or you are swamped during the busy tax season, outsourced tax preparation can enhance your service portfolio.

Is Outsourcing Tax Manageable with QX?

This clearly indicates the massive market and opportunity that lies ahead of CPAs and accounting firms. From keeping track of the changing tax regulations and connecting with clients to assembling the necessary forms and heaves of paperwork, accountants are constantly on their toes. Outsourcing income tax preparation is a powerful way to supplement your 1040 practice. If you’re considering income tax outsourcing, you’ll find the information you need here. We’ll discuss what it is, who needs it, offshore vs. onshore options, and full vs. partial outsourcing.

This year we also asked specific questions regarding COVID-19 and its impact on your firm’s gross profit margins and average fixed prices, while also touching on how our clients were affected. Whenever possible, utilize a digital signature process – our experience is that firms who use a digital process are highly successful in getting the needed signatures. And while you’re at it, consider making the consent form valid for up to ten years to eliminate obtaining consent every year. All SurePrep outsourcing staff are required to complete a comprehensive 10-week training program. The training consists of classroom sessions, group discussions, and testing. Staff must periodically complete refresher programs to stay up to date with changing policies and procedures.


Let’s look at the top 5 traits of a reputed and trustworthy outsourced tax preparation service provider. A clear benefit of outsourcing tax preparation is that it makes data collection easier. While most accountants are swamped during the unavoidable, busy tax season, staying on top of data collection for a seamless tax filing process can be challenging. Outsourcing makes it easier to get ahold of someone when there are questions, but data collection, organizing, and sorting are also prompt so that risks can be avoided and deadlines can be met. Any mistakes concerning tax filing can have devastating consequences for your accounting firm. Taxation laws and rates are constantly changing, and we should follow them.

Myth: Outsourced returns are of inferior quality; my staff will waste time fixing the returns.

While nerve wracking at first because it is the unknown, outsourcing tax services overseas can provide your accounting firm with wonderful opportunities with the right relationship. Talk with someone you know who is outsourcing to minimize stereotypes and fears. Implement quality control processes to monitor the work of the outsourced staff. Regularly review and assess their performance against predefined quality benchmarks. CPA firms save a lot from the infrastructure costs they might have to bear if they were to keep tax preparation in-house. The resources and infrastructure account for 50% of the costs that go into the tax preparation tasks.

In subsequent years, we branched into tax automation technology and became a leader in the space. Our tax preparation services have remained a core part of our mission throughout. We use our own industry-leading technology to prepare returns and pass the time savings to our clients. Some of the world’s largest CPA firms trust our experience and use our services. An outsourcing service provider should be able to solve your staffing woes by giving you access to highly skilled labor. You need to find out if your outsourcing partner has a dedicated team of experts who are qualified and seasoned professionals with experience in handling tax preparation.

We should have been bolder to request an update on the progress of those files that were taking longer than we had expected. Fast forward 10 years when COVID-19 hit the world and turned the workforce upside down. The following year, the Great Resignation affected many small businesses, from restaurants to tax and accounting firms. Some of those who applied did not show up for the interview; others requested a $100,000 starting salary plus benefits or were not even qualified for the position. Tax outsourcing services have emerged as a strategic solution in transforming the tax return prepara… A flexible working approach is a crucial trait that you should be looking for.

This investment has ensured that our clients have the highest level of reliability, performance, and security available. Xpitax® has been handling international tax outsourcing for accounting firms for over 18 years. We’ve heard almost every question, myth, and outrageous rumor you can think of when it comes to international tax outsourcing.

Our skilled professionals are ready to provide your firm with an additional set of hands whenever you need them, ensuring your business runs smoothly and efficiently. Connect firms, clients, and staff with accounting workflow software while creating efficiencies that accelerate growth, support strategic decision-making, provide additional capacity and increase visibility. This essential function guarantees the precision, compliance and operational efficiency of financial processes. Your fee structure should factor in your cost, plus a reasonable profit margin. On the other hand, you’ll want to make sure you are not charging more than the market will bear. Some of the shortfall was caused by the limitations resulting from the COVID-19 pandemic, but there is also the undeniable aging of the profession.

Sign up for weekly professional and technical updates from PICPA’s blogs, podcasts, and discussion board topics by completing this form. John F. Raspante, CPA, CDFA, is director of risk management at McGowan Pro in the New York metropolitan area. Per IRS’s recent estimates, about 144.3 million people pay taxes in the U.S. The American tax system has a tax code that is more complex than rocket science, and even though most people think about taxes only in April, the process actually runs all year long.

Tax preparation services are the most sought-after outsourcing services amongst CPA firms in the USA. Outsourced tax preparation services have numerous advantages, including cost savings, security, faster turnaround times, and state-of-the-art infrastructure. Yet, some misconceptions about tax outsourcing services prevent accounting firms from reaping such benefits. Data security and confidentiality are vital for your accounting firm with increased data breaches. Partnering with an outsourced tax preparation service provider will ensure that your valuable, sensitive data is secure over the cloud using robust and cutting-edge security.

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