20 Questions to Ask New Tax Clients for Easier Onboarding

When onboarding new tax clients, gathering general details about their tax history and current income level is a necessity. However, you also need to get more specific and inquire about taxable considerations, such as:

• Alimony paid or received
• A change in marital status in the past year
• Significant assets sold
• College tuition costs for themselves or dependents

These factors can have important implications for a client’s tax liability. So, what are the best questions to ask to get the relevant information you need for a new tax client?

We compiled a comprehensive list of the 20 best questions to ask new clients during the onboarding process. We also share where to collect and file their responses to avoid delays during the busy tax season ahead.

Initial Overview Questions

1. Can you provide a brief overview of your current financial situation?

Start by asking new tax clients some broad questions like this one, which can give you a better idea of the client’s general financial standing.

Their answer may impact how you handle their tax return based on their unique needs or circumstances. It can also help you decide which staff member you assign to their account.

 

2. What was your total income for the last tax year?

Next, follow up by asking about their prior year’s total income for further details on their financial situation. This question helps you establish a baseline for understanding the client’s income in the current year and their potential tax liability.

 

3. Are you currently employed, self-employed, or have income from other sources (like investments or rental properties)?

For proper tax preparation, you need to know a client’s sources of income. That’s essential to ensure you correctly categorize their income and complete the appropriate forms, like the Schedule C form for clients who are sole proprietors.

Some tax credits and deductions are also specific to certain types of income. Therefore, knowing how and where a client generates income can help you determine which deductions they may qualify for.

 

4. Do you have any foreign income or financial interests in other countries?

Tax prep for clients with financial interests abroad can be more complex.

An awareness of any client’s foreign involvement before filing can ensure regulatory compliance with both domestic and international tax laws.

You may need to fill out Form 2555, Foreign Earned Income, Form 8938, Statement of Specified Foreign Financial Assets, or other relevant forms for such clients.

Personal and Family Information Questions

 

1. Have you experienced any significant life changes in the past year (e.g., marriage, divorce, children, buying a house)?

Life changes like getting married or having children in the past year can significantly affect a client’s tax liabilities, filing status, and possible deductions.

If any of these changes apply to your client, you can be sure they receive the tax benefits they’re entitled to and meet any new tax obligations they have. For example, you might enter a new tax bracket for newly married couples filing jointly for the first time.

 

2. Do you have any dependents? If so, can you provide their details?

Dependents affect the tax credits and deductions someone may qualify for, such as the Child Tax Credit or Earned Income Tax Credit. Ask new clients if they have any dependents and, if so, how many, since this could help minimize their tax liability.

 

3. Are you currently paying or receiving alimony?

Similarly, you should know if a new client currently pays or receives alimony, which can impact their level of taxable income. Be aware that receiving or paying child support likely has no implications for taxpayers, but alimony payments can in certain instances. 

 

Tax History and Compliance Questions

 

1. Are your previous years’ tax returns available for review?

Requesting a new client’s previous years’ tax returns (or Form 1040 from prior years) can offer insight into a client’s tax history and past deductions.

This information may help you determine whether your client follows a specific tax strategy you should continue in the current tax year.

You may also be able to identify deductions and credits available to them overlooked by their previous CPA or tax preparer.

 

2. Have you encountered any past issues with the IRS or state tax agencies?

If a client has had prior issues with the IRS or state reporting agencies, it’s critical to understand what happened to avoid making the same mistake again.

IRS negotiations and investigations of any nature can be costly and time-consuming. So, be proactive and learn about any possible issues to avoid penalties or recurring problems with the current year’s filing.

Deductions and Credits Questions

 

1. Have you made any charitable donations or significant contributions this year?

Ask your new clients if they’ve made charitable contributions in the past year, which can help them qualify for certain tax deductions.

The general regulatory standard for charitable contributions is that these itemized deductions must be included on a client’s Schedule A in order to qualify.

 

2. Have you incurred any significant medical expenses not covered by insurance?

If your new client paid for any significant medical expenses out of pocket in the current tax year, not covered by health insurance, you can sometimes deduct these costs.

The current industry guidelines on medical deductions are that taxpayers can deduct the portion of their medical and dental expenses that exceed 7.5% of their AGI.

 

3. Did you pay for education-related expenses for yourself or a dependent?

Qualified education expenses could warrant certain tax benefits, so inquire about any such payments the client has made to help them minimize their tax liability for the current year.

That typically includes any amount paid for tuition, fees, or other related expenses.

 

4. Do you have any outstanding debts or loans, such as student loans or a mortgage?

New clients should share details on any outstanding debts that could support their tax strategy. The interest expense on certain types of loans, including qualified mortgage interest, student loan interest, and others, can be claimed as a deduction or tax credit.

Investments and Assets Questions

 

1. Do you have any retirement accounts (like IRAs or 401(k)s)? Have you made any contributions or withdrawals?

Have new clients disclose this vital tax information about their retirement planning and any contributions or withdrawals made to their retirement accounts in the current year.

These transactions can have significant tax implications, and you need to be aware to fill out the appropriate forms, like Form 5498 for IRA contributions.

 

2. Have you sold any major assets this year, such as property, stocks, or a business?

Significant assets the client sold over the previous year can result in capital gains or losses. You must report these sales on Form 8949, Form 1099-S, Form 1099-B, or other relevant forms for tax compliance.

 

Business or Freelance Work Questions

 

1. Have you conducted any business or freelance work? If so, can you provide details about your income and expenses?

You can ask clients if they have any self-employment or freelance business income to report for the year, which can be critical for tax calculation purposes.

Such individuals are typically subject to an additional self-employment tax, though they may also qualify for certain deductions and credits based on their business-related expenses throughout the year.

 

2. Are there any industry-specific tax issues we should be aware of (for business owners or professionals)?

Clients who own businesses in certain industries, like those working in agriculture or child care, may have unique legal requirements or tax obligations.

You need to know about these requirements because they can impact the tax deductions and credits your client is entitled to. It also helps you provide tax advisory and strategy services specific to their needs.

Future Planning and Concerns 

 

1. Do you have any upcoming transactions or major financial changes planned for the next year?

Anticipating future events can help with tax planning for the following year.

Being aware of these circumstances means you can be proactive and offer advice so your client can optimize their tax positioning for the year ahead.

 

2. Do you have any specific concerns or questions about your tax situation?

Wrap up your tax-focused inquiries by asking this open-ended question so clients can share any additional thoughts or concerns about their current tax situation.

Directly addressing their concerns allows you to meet their needs and expectations and improve service satisfaction.

Client Preferences

 

1. How do you prefer to communicate and receive information (e.g., email, in-person meetings)?

From a practical standpoint, ask your clients how they prefer to communicate on matters related to their tax preparation.

Be sure you agree on a preferred communication channel, whether over email, phone, or in person, to ensure efficient and effective interactions for timely financial reporting and filing.

When Is the Right Time to Ask a New Client Questions?

You don’t immediately need to bombard clients with a long list of questions. However, these 20 questions do contain important information you need to know to accurately file a client’s tax returns by the proper deadline.

Initial Consultation (Broad Questions)

During your first meeting with a new client, start with the broader or more general questions covered above. That can help you get acquainted with one another beyond your tax preparation services relationship.

Begin with the questions in these categories:

• Personal and family information
• Overall financial situation
• Income sources
• Tax history and compliance

Follow-Up Meetings (More Detailed Questions)

Once you’ve had the chance to review the initial information the client provided, you may schedule a follow-up meeting in person, virtually, or over the phone to get the more specific details you need to file their tax return, like the questions listed in these categories:

• Deductions and credits
• Investments and assets
• Business or freelance work
• Future planning and concerns
• Client preferences