I’ve worked with hundreds of CPAs and tax firms, and here’s what I’ve learned: Tax season isn’t the problem—last-minute tax filing clients are.
These clients disrupt the flow of work, making everything feel disproportionate and chaotic. It’s a common topic on Reddit too, where tax pros share how many returns they extend because clients fail to send documents on time.
Whether its long-time clients tossing in curveballs or new ones rushing in days before the deadline, how you handle these situations directly impacts your profitability.
So, how do you deal with last-minute tax clients?
At Credfino, we combine a consulting approach with the expertise of our offshore tax team. Ready to explore how we can help? Schedule a call when you are ready.
Till then, learn the different types of last-minute tax filers and an actionable plan to manage the chaos.
This tax season kicks off on January 27, with federal filings due by April 15. Clients who can’t meet the deadline must file an extension using Form 4868. The IRS expects over 140 million 1040s for the 2024 tax year, giving tax professionals 11 weeks to handle returns or file extensions for clients across the nation.
Sounds manageable? Not quite.
Here’s why:
The combination of high return volume, tight deadlines, and an ongoing talent shortage makes this a formidable challenge. Many firms are turning to offshore tax prep to handle the workload.
Related Read – How Tax Season Looks Like When Tax Firms Offshore Tax Prep
But even with proper planning, tax firms face a major obstacle: clients who delay.
When clients:
It’s a recipe for chaos:
Take a typical scenario: If clients don’t send documents until April 1, that leaves firms with just two weeks to process returns or file extensions. For both existing clients making late changes and new clients scrambling at the last minute, the result is the same—a bottleneck that disrupts everything.
Tax firms that want to avoid last-minute chaos need to take action—and it starts with recognizing the types of late tax filers.
There are two main groups:
Each group requires a tailored approach and training to handle their specific challenges effectively.
Tax professionals often encounter a significant challenge with existing clients—especially those who only interact once a year. Clients that bring year-round work with tax advisory and bookkeeping are easier to train.
But once a year communication client, who can be categorized as good clients in terms of payment but fail to prioritize sharing necessary documents on time.
The result? Disrupted workflows, derailed planning, and unnecessary stress. But with the right strategies, you can turn these challenges into opportunities for smoother tax operations.
Why Do Clients Delay?
Clients typically delay because they don’t fully understand the impact of their actions on your process. For instance:
The Two Types of Existing Late Tax Clients
These clients miss every deadline you set and leave you with no choice but to file for an extension.
Example:
Imagine you’ve set March 1 as the deadline for submitting documents for 1040 filings. Client A, despite multiple reminders, doesn’t send anything until April 1, leaving you scrambling. Filing their return on time becomes nearly impossible, forcing you to file for an extension.
If you have been dealing with such clients for many years now, you will know their behavior.
How to Handle Them:
Example: “Dear Client, to ensure we meet the IRS filing deadline, please send all your tax documents by March 1. Missing this deadline will result in filing for an extension, and any penalties or interest will be your responsibility.”
Send out the Pre-season Announcement, including
→ Share your Document Submission Process upfront.
→ Announce available slots for submissions.
→ Set a deadline for booking a slot.
→ Send weekly reminders throughout the month.
Some clients will still ignore the system. That’s fine—file their returns for an extension and give them another deadline for document submissions.
Example: “If we don’t receive your documents by the deadline, we will file for an extension, and you may incur penalties or interest from the IRS.”
These clients attempt to comply but forget to include crucial information until the final stages of review.
Example:
Client B will submit their documents by March 1. However, during the final review on March 25, they suddenly inform you about an additional income source, such as 1099 income, which completely changes their tax calculations. This late information derails your plans and adds pressure during peak season.
How to Handle Them:
Option 1: The Strict Way
Charge fees upfront for late changes.
Example: “We charge an additional $200 for any changes submitted after the review process begins.”
Downside: While this approach might discourage late submissions, it can create friction and harm long-term client relationships.
Option 2: The Lenient Way
Example: “All tax documents must be submitted by March 1. Changes submitted after this date may incur a late adjustment fee.”
Example: “We’ve made this adjustment for you without a fee this time, but moving forward, timely submissions are crucial to avoid delays.”
Example: “I’m glad we could finalize your return on time. If you’re satisfied with our services, we’d greatly appreciate a 5-star review or testimonial!”
Example: “Before we finalize, can you confirm there are no additional income sources or changes we need to know about?”
Why This Approach Works
Early education and clear communication establish accountability. Using a proactive calendar approach ensures clients understand what’s at stake and allows you to plan better.
The lenient approach protects the relationship while creating opportunities for goodwill. Offering a “first-time grace” shows understanding, but establishing clear policies ensures professionalism.
Pre-qualifying prospects helps you focus on serious clients who respect your time and processes, especially during tax season.
Here’s how you can streamline this step:
A. Use a Clear Pricing Range
Set expectations upfront by providing a transparent pricing range based on the complexity of the work.
Example:
“For individual tax returns, our pricing starts at $800 and goes up to $5,000 depending on the complexity of your situation. This ensures accurate, timely filings tailored to your needs.”
Why This Works:
It filters out prospects looking for bargain services.
Serious clients will respect your expertise and value your work.
Saves time by reducing back-and-forth discussions about pricing.
B. Ask for Full Payment Upfront
Eliminate potential payment issues by requiring full payment before you begin. Avoid the 50% deposit approach, as it can lead to delays in collecting the balance.
Example:
“To secure your spot and begin work, we require full payment upfront. This ensures we can allocate resources effectively during this busy season.”
Why This Works:
Ensures commitment from the client.
Reduces the administrative hassle of chasing payments.
Aligns cash flow with your workload.
C. Set Boundaries by Communicating Deadlines and Capacity Limits
Let prospects know about your workload and the cut-off dates for accepting new clients. Be upfront about your schedule and set firm boundaries.
Example:
“We’re accepting new clients until March 15 for guaranteed filing by April 15. After this date, we can only offer extensions or premium-priced filings based on availability.”
Why This Works:
Manages client expectations.
Reduces last-minute rushes that disrupt workflows.
Helps prioritize clients who respect your deadlines.
D. Enforce Premium Pricing for Late-Season Services
During peak tax season, demand skyrockets. To reflect this high demand, implement premium pricing for clients who come in after a certain date.
Example:
“Given the time of year, we charge a 25% premium for new filings between April 1 and April 15. If this works for you, we’ll need payment in full today to proceed.”
Why This Works:
Discourages procrastination and incentivizes early action.
Compensates for the extra effort and stress of late-season filings.
Ensures you’re fairly compensated for working under tight deadlines.
Practical Implementation Tips
Develop a simple online form where prospects provide basic details like the type of return, income range, and filing status.
Include the pricing range and payment terms in the form for immediate transparency.
Use email templates or automation tools to communicate deadlines, capacity, and premium pricing to all inquiries.
Example: An auto-reply email like:
“Thank you for reaching out! We’re excited to help you with your tax needs. Please note our pricing ranges from $800–$5,000 depending on complexity, and full payment is required upfront. For new clients requesting filings after April 1, a 25% premium applies.”
Add your pricing and payment policies to your website or client intake materials to avoid surprises later.
Example: Create a “Late-Season Filing Policy” document that outlines deadlines, premium pricing, and payment expectations.
Tax season doesn’t have to feel like chaos. By setting clear boundaries, implementing better systems, and communicating effectively, you can turn even last-minute rushes into opportunities for growth and profitability.
The first step is to understand the different type of late tax filers and treat them accordingly.
Type of Last-Minute Tax Filer | Description | Solution |
1. Existing Clients Who Don’t Share Documents | Clients miss deadlines entirely, leaving no choice but to file extensions. | 1.Educate early with reminders. 2. Use a timeline with deadlines.- 3. File extensions for late submissions. |
2. Existing Clients Who Submit Late Changes | Clients submit documents but add critical info (e.g., 1099) during final review. | 1. Set late-change policies. 2. Offer one-time grace period. 3. Confirm no further changes before filing. |
3. New Clients Who Come in Last Minute | Prospects approach late, expecting immediate service. | 1. Pre-qualify with clear pricing. 2. Require full payment upfront. 3. Charge a premium for late filings. |
Tax firms in the better position make the better decisions. If you are struggling with existing clients, you won’t be able to make the best out of the situation.
To make that happen, you need to have capacity and bandwidth to equip rush hour clients. Offshoring tax prep is one way to create capacity.
Credfino is offshore tax preparation partner for over 85 CPA and Tax Firms in US and Canada and we empower them to pick premium clients at premium price in rush hour.
Looking for a partner for support in tax season? Get in touch.
Your offshore tax team under white label tax preparation services will serve as an extension of your team, empowering you to brand the offshore tax services as your own.
The real issue independent CPAs need to address? Employee retention. And Outsourcing tax preparation is a way to do it.
Every year, we watch tax pros go absolutely bananas from February to mid-April.
Why?
Because they’re cramming 52 weeks of work into just 15 weeks. And most tax pros have just accepted this madness as their FATE. They think it’s just “part of the job.”