How Long Does It Take an Accountant to Do Taxes?

The time an accountant takes to prepare taxes varies significantly, influenced by the complexity of financial information and the efficiency of client communication. Understanding these factors helps manage expectations, especially as tax deadlines approach.

Factors Affecting Tax Preparation Time

The complexity of a taxpayer’s financial situation is the primary determinant of how long an accountant will spend on tax preparation. A simple return, such as one for an individual with a single W-2 income and the standard deduction, might take only a few hours. More intricate scenarios can extend the process to days or even weeks.

Returns with multiple income sources increase preparation time. This includes income from various employers, independent contractor earnings reported on Form 1099-NEC, or passive income from partnerships and S-corporations detailed on Schedule K-1. Investment activities, such as numerous stock sales reported on Form 8949, or foreign income and assets requiring specialized forms like Form 8938, add layers of complexity. Business income and expenses, reported on Schedule C for sole proprietorships or Schedule E for rental properties, demand extensive reconciliation and categorization of revenues and deductions. Itemizing deductions instead of taking the standard deduction also requires meticulous review of medical expenses, mortgage interest, state and local taxes, and charitable contributions.

The completeness and organization of the client’s provided documents also play a substantial role. Accountants spend time if documents are missing, receipts are disorganized, or if extensive reconciliation of bank and credit card statements is necessary to reconstruct financial records. This often leads to delays as the accountant must request clarifications or additional documentation. This back-and-forth communication can prolong the process, especially during peak tax season.

The type of entity for which the tax return is being prepared further influences the time commitment. Individual tax returns (Form 1040) are less time-consuming than those for partnerships (Form 1065), S-corporations (Form 1120-S), or C-corporations (Form 1120). Each entity type has distinct reporting requirements and involves more detailed financial statements and tax calculations. Corporate returns, for instance, involve balance sheets, income statements, and complex depreciation schedules, requiring in-depth analysis and adherence to specific tax regulations.

The Accountant’s Tax Preparation Steps

An accountant’s tax preparation process follows a structured sequence, beginning with the initial receipt of client information. Upon receiving all necessary documentation, the accountant proceeds with data input, transferring figures from W-2s, 1099s, K-1s, and other financial statements into specialized tax software. This initial data entry forms the foundation of the tax return.

Following data input, the accountant undertakes a thorough reconciliation of accounts. This involves cross-referencing bank statements, credit card statements, and other financial records with provided income and expense summaries. For businesses, this step ensures all revenues are accurately reported and eligible business expenses are properly categorized and substantiated. This detailed review helps identify any discrepancies or missing information.

The application of relevant tax laws and deductions is an important phase. Accountants identify all applicable credits and deductions, such as the Earned Income Tax Credit, child tax credits, or deductions for qualified business income, to optimize the client’s tax position. This includes navigating complex areas like depreciation calculations for business assets or assessing passive activity loss limitations for rental properties. The accountant ensures compliance with current tax regulations and identifies opportunities for tax savings.

An internal review process follows the initial preparation. A senior accountant or another qualified professional reviews the prepared return for accuracy, completeness, and adherence to tax laws. This multi-layered review helps catch potential errors, ensures consistency, and verifies that all supporting documentation aligns with the figures reported. This quality check minimizes the risk of IRS inquiries or audits.

Communication with the client for clarifications is an ongoing part of the process. If questions arise about specific transactions, missing documents, or unusual income or expense items, the accountant will reach out to the client. This dialogue ensures all information is accurate and that the client understands the implications of various tax positions taken. Once all clarifications are addressed and the return passes internal review, a final review is conducted with the client to explain the results and obtain approval.

The concluding step is the electronic filing (e-filing) of the tax return with the IRS and relevant state tax authorities. E-filing provides faster processing of refunds and acknowledgments of receipt. In some cases, such as specific state filings or amended returns, paper filing may still be necessary.

Client Actions to Facilitate Timely Preparation

Clients can significantly streamline the tax preparation process by proactively organizing their financial information. Gathering all necessary documents, such as W-2s, 1099s, and K-1s, as soon as they are received, prevents delays. Keeping these documents in a dedicated physical or digital folder throughout the year ensures readiness when tax season arrives.

Categorizing income and expenses throughout the year is an effective strategy. Instead of providing a stack of unsorted receipts or unclassified bank statements, clients can use spreadsheets or accounting software to track and categorize transactions regularly. For instance, business owners can maintain separate accounts for business income and expenses to simplify reconciliation. This organized approach reduces the time an accountant spends sifting through raw data, allowing them to focus on tax optimization and compliance.

Responding promptly to accountant queries is important for maintaining momentum. When an accountant requests additional information or clarification, a quick response helps avoid bottlenecks. Delays in providing requested details can halt progress and push the return further back in the accountant’s queue, especially during busy periods. Utilizing secure client portals provided by many accounting firms can facilitate efficient and secure exchange of information.

Providing complete and accurate information upfront minimizes the need for follow-up questions and revisions. This includes sharing details of significant life changes, such as marriage, birth of a child, home purchase or sale, or starting a new business, as these events have substantial tax implications. Communicating these changes early allows the accountant to factor them into tax planning and preparation from the outset. Using a tax organizer provided by the accountant can serve as a helpful checklist to ensure all relevant information is submitted.