Attention Accountants: Common Tax Concerns

Posted on: March 4, 2021 by Huntersure

Working to insure accountants can sometimes entail raising their awareness of common tax concerns their customers may have. In some cases, frequent taxation issues could have insurance and legal ramifications for the accountant in question if certain rules and regulations are not followed. As an insurance agent, you can help alert your client to their accountant professional liability and the different issues that may arise if they don’t practice due diligence in handling these common concerns. Fortunately, increasing their awareness of these issues can help prepare them for giving responsible advice and avoiding legal liabilities regarding common tax concerns.

Retirement Contribution Limits and Tax Liabilities

One common question many accountants hear from their clients is whether retirement accounts will impact yearly tax payments. The answer, of course, is that it depends on which type of retirement account individual customers have. Your clients who work in accounting should make sure to familiarize themselves with the contribution limits and tax liabilities for different types of retirement accounts so they can provide detailed and accurate information to their own clients.

Common Tax Form Mistakes and Filing Errors

Another common issue many accountants have to deal with is filing errors and other mistakes on tax forms that their clients then need help correcting. If your clients don’t fix errors that they catch or forget to submit all the required information for their own customers, they could potentially face several legal risks. Some of the most common mistakes accountants or individuals might make that should be avoided at all costs include:

• Accidentally writing down an incorrect bank account number or other information
• Forgetting to fill in all required information
• Forgetting to sign in the appropriate places
• Filing late and facing resulting fees and other penalties

Quarterly Estimated Taxes for Freelancers and Independent Contractors

If your clients work with freelancers or independent contractors during tax season, they’ve likely run into the issue of quarterly estimated tax payments. Quarterly taxes are generally paid by the self-employed, and failure to pay them can lead to surprisingly large tax bills come springtime. Make sure your clients understand how to calculate quarterly estimated taxes for the freelancers they work with – in many cases, it may be better to overpay rather than underpay on estimated taxes.

Accountants may face several premium-raising risks and legal liabilities if they fail to practice due diligence when it comes to some of the most common tax concerns. However, as an insurance agent, you can help your clients who work in accounting to get familiar with these frequent concerns so they’ll be prepared to handle them as they arise. Run through this list with your clients to help them get a better understanding of accountant professional liability and what they need to know to prepare.

About Huntersure

Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.

Posted in: Accounting