How US Tax Season Works: A Guide for Tax Firm Teams

This guide explains the US tax season from inside a tax firm. It’s written for new preparers, seasonal staff, offshore teams and anyone who has worked in tax outside the US. Firm owners can hand it to a new hire on day one.

It covers how the system works, not this year’s numbers. Exact dates shift when a deadline lands on a weekend or holiday, and dollar amounts change every year, so the last section links to the IRS pages that keep those current.

Tax year and filing season. A return covers one tax year, which for most people and businesses is the calendar year. It’s prepared and filed the following year. So the filing season that runs from January to April is spent on returns for the year that just ended, using documents dated in that year.

The basics: who files what

The IRS collects federal income tax. Unlike countries where the tax authority prepares an assessment, the US relies on individuals and businesses to prepare and file their own returns. The IRS checks them later against the forms it receives from employers, banks and brokers. Not everyone has to file, but anyone who meets the filing requirements must, and many people below them file anyway to claim a refund.

If a deadline falls on a weekend or legal holiday, it moves to the next business day. Form 1041 is the income tax return for a trust or estate. It’s separate from the estate tax return filed when someone dies with a large estate.

Pass-through entities. Partnerships and S corporations mostly don’t pay income tax themselves. Each owner gets a Schedule K-1 showing their share of the income, and reports it on their own 1040. That’s why business returns are due a month before individual returns: owners need their K-1s first.

Example: a business owner with two returns.

1. The bookkeeping for the owner’s S corporation is finished for the year.
2. The firm prepares the S corporation’s Form 1120-S, due March 15.
3. The return produces a Schedule K-1 showing the owner’s share of the business income.
4. The firm prepares the owner’s personal Form 1040, which includes the K-1 alongside their other income.

The personal return can’t be finished until the business return is. If the business return is late or extended, the personal one waits too.

Common schedules on a 1040. Schedule C reports a sole proprietor’s business income and expenses, and Schedule SE adds self-employment tax on that profit. Schedule E covers rentals and K-1 income. Schedule D and Form 8949 cover sales of stocks and other assets. Schedule A is for itemized deductions, which most people skip in favor of the standard deduction.

Federal and state returns

Most states have their own income tax and their own return, filed alongside the federal one. A handful don’t tax wages at all. Clients who moved during the year, or who live in one state and work in another, can need two or three state returns. Some cities and counties add a local income tax too.

Most state deadlines match the federal ones, but not all. Check each state’s revenue department rather than assuming.

Paying during the year

The US collects most tax before the return is filed.

• Withholding. Employers take tax out of every paycheck and report it on the employee’s W-2.
• Estimated taxes. Self-employed clients, landlords and investors pay quarterly estimates, usually due April 15, June 15, September 15 and January 15 of the following year.

The return settles the difference: a refund if too much was paid, a balance due if too little.

An extension is for filing, not paying. An extension (Form 4868 for individuals, Form 7004 for businesses) moves the filing deadline. Tax owed is still due on the original date, with interest and penalties on anything paid late. Firms usually estimate the balance and have the client pay it when the extension is filed.

Extensions are routine. Many firms use them as a normal way to handle complex returns and late documents. An extended return doesn’t mean the client or the firm did anything wrong.

The documents clients receive

Most of what a preparer needs arrives in the client’s mailbox or online accounts between January and March.

The K-1 problem. A K-1 comes from someone else’s return, prepared by someone else’s accountant. If that business extends, the client’s K-1 may not arrive until September, and the client’s own return can’t be finished until it does. Missing K-1s are a common reason more complex individual returns get extended.

Corrected forms. Brokers often reissue 1099s in March after adjustments. Firms with many investment clients wait for them, or plan to amend.

Why firms still ask for forms the IRS already has. New staff often ask why the firm needs a client’s W-2 when the IRS gets a copy. The IRS doesn’t prepare the return; the preparer does. Every amount has to be reported accurately, anything missing has to be caught, and the forms have to match what the client tells you. The IRS only uses its copies later, to check the return. Some forms also need judgment. Not everything on a 1099-K is taxable income, for example: it can include reimbursements between friends or personal items sold at a loss.

What the client has to provide

Plenty of what goes on a return isn’t on any form. Firms collect it with a tax organizer, a questionnaire sent with the document request. It usually covers:

• Life changes: marriage, divorce, a new child, a death in the family, a move to another state
• Business income and expenses for Schedule C clients, often from their own bookkeeping
• Rental income and expenses
• Charitable donations, childcare costs and education expenses
• Estimated payments the client made during the year
• Letters from the IRS or the state, and any Identity Protection PIN
• Bank details for a refund or a balance due

The fastest-moving firms build each client’s document list from last year’s return. Every W-2, 1099 and K-1 on it is something they’ll probably need again.

The shape of a tax season

Every firm’s year has the same rhythm, even if the exact dates move.

How a return moves through a firm

The steps are similar in almost every firm. What changes is who does each one and how it’s tracked.

1. Engagement. The client signs an engagement letter setting out scope, fees and responsibilities. Firms may also ask for Form 8821 when they need to see the client’s IRS records, or Form 2848 when they’ll represent the client before the IRS. Neither is needed just to prepare a return.
2. Intake. The organizer and document request go out. Documents come back through a portal, by email or on paper, and someone tracks what’s received and what’s still missing.
3. Ready to prepare. Each firm decides when a return is ready for preparation. Some wait until every document has arrived, while others start with what’s available and track the outstanding items. Starting too early creates rework when the preparer has to reopen the same return several times.
4. Preparation. The preparer enters the return in professional tax software. Many firms use tools that read source documents and fill in the data automatically. Questions for the client are collected and sent together.
5. Review. A second person checks the return against the software’s diagnostics, last year’s return and the source documents. In a solo practice, the owner reviews their own work, ideally with a checklist and a break in between.
6. Signature. Before the return is sent, the client reviews it and signs an e-file authorization. That’s Form 8879 for an individual return, with related versions for business returns, such as Form 8879-S for S corporations and 8879-PE for partnerships. Most firms collect it by e-signature, which comes with IRS identity verification requirements. The firm keeps the signed form; it isn’t sent to the IRS. Many firms send the invoice at the same time and file once it’s paid.
7. E-file. Sending a return isn’t the same as having it accepted. The IRS and each state send back their own acknowledgment, usually within a day or two, and a federal return can be accepted while the state return is still pending or rejected. Common rejections include a Social Security number that doesn’t match IRS records, or a dependent someone else has already claimed. Most rejected returns are corrected and sent again, and the IRS allows a short window for a return that was sent on time to be fixed and still count as on time. Some can’t be fixed electronically and have to be filed on paper.
8. Payment or refund. A balance due is paid by direct debit set up with the return, or through the IRS website. Refunds usually arrive by direct deposit.
9. Afterward. The firm keeps the return, the signed e-file authorization and supporting records under IRS rules and its own retention policy. Form 8879 generally has to be kept for three years from the return’s due date or the date the IRS received it, whichever is later. IRS and state notices can arrive months later, often because a form the IRS received doesn’t match the return.

Why returns get stuck

Most of a return’s time in a firm is spent waiting between steps, not being worked on.

Many firms track two things for every return: its stage, and what’s blocking it. A return can sit in “in prep” for a week while it waits on one answer from the client. The question everyone wants answered at a glance is the same: where does each return stand, and what is it waiting on?

Who does what

A return usually passes through several hands. The roles are often:

• Admin or client coordinator. Sends requests, chases documents, books calls, and sends signature requests and invoices.
• Preparer. Enters the return, flags what’s missing and drafts questions for the client.
• Reviewer. Checks the return, sends notes back to the preparer and approves it for signing.
• Owner or signing practitioner. Owns the client relationship, makes the judgment calls and signs off.

In a small firm, one person often holds several of these roles. A firm of one to five people might be an owner who reviews and signs, a preparer or two, and seasonal help with admin.

Credentials.

• CPAs (Certified Public Accountants) are licensed by their state. They can do audit and accounting work as well as tax, and can represent clients before the IRS.
• EAs (Enrolled Agents) are licensed by the IRS for tax only. They can also represent clients before the IRS on any tax matter.
• Attorneys can represent clients too, and some specialize in tax.
• Other paid preparers can prepare returns but have limited or no rights to represent clients.

Paid preparers generally need a PTIN (preparer tax identification number), renewed every year. Firms that e-file also need an EFIN (electronic filing identification number). Preparers and firms that expect to file 11 or more covered returns in a year generally have to e-file them, with some exceptions.

Federal law also restricts how preparers use and share client tax information. Some sharing for preparing the return is allowed without separate consent, but other uses need the client’s consent. Sending return information to preparers outside the US generally needs specific consent from the client, plus extra safeguards.

Keeping client data safe

Tax files hold Social Security numbers, bank details and income, which makes them a target for identity theft. US tax practices are required to keep a written information security plan. Day to day, that means:

• Use the firm’s portal or other approved secure channels, never personal email or messaging apps.
• Confirm the recipient before sending anything.
• Keep client files off personal devices.
• Report anything unusual straight away, such as an unexpected request to change bank details.

Where firms do it differently

• Intake style. Traditional firms hold in-person interviews, which many older clients still prefer. Others take drop-offs, and many now work fully remotely through a portal. Some take work first come, first served, while others book clients into delivery slots.
• Internal deadlines. Many firms set their own cutoffs well ahead of the IRS dates, such as a date by which documents must be in, to leave time for preparation, review and signing.
• Extensions. Some firms extend every client with K-1s, or every complex return, by default and finish them calmly over the summer. Others push to file almost everything by April 15.
• Client mix. Some firms serve mostly employees with simple returns, at high volume. Others focus on small business owners, investors with many K-1s, or a niche such as real estate, medical practices, Americans living abroad or clergy.
• Services. Tax-only firms are seasonal. Firms that also do bookkeeping and payroll have work all year, plus an extra January crunch for W-2s and 1099s.
• Pricing. Some firms charge per form or schedule, often from the tax software’s fee schedule. Others charge flat fees by complexity, or a monthly subscription that bundles tax with year-round advice. Hourly billing is rare for individual returns.
• Getting paid. Some take a deposit with the engagement letter. Some require payment before e-filing. Others invoice after filing and follow up.
• Review. Larger firms have a separate reviewer for every return. Solo practitioners review their own work. A growing number outsource preparation and keep review in-house.
• The year outside tax season. Some owners work hard from January to April and then slow right down. Others spread planning, advisory and extension work across the year.

Words you’ll hear

• Busy season. January to April 15. Extension season runs to October 15.
• Tax year. The year a return covers, usually the calendar year before the filing season.
• Proforma. Rolling last year’s return data into the new year’s software.
• Organizer. The questionnaire and document list sent to clients each year.
• Extended. A return with an extension filed, due in September or October.
• Acknowledgment. The IRS or state’s response to an e-filed return: accepted or rejected.
• Reject. An e-filed return the IRS or state refused, usually for a data mismatch.
• 8879. The client’s signature authorizing the firm to e-file.
• K-1. A partner’s or shareholder’s share of a pass-through entity’s income.
• Notice. A letter from the IRS or state, often about a mismatch or a balance due.

Where to check current dates and amounts

This guide leaves out year-specific dates, thresholds and dollar amounts on purpose. For the current year, use these:

• IRS Publication 509, Tax Calendars for every federal filing and payment date
• When to file for individual deadlines
• Get an extension to file your tax return
• Estimated taxes
• About Form 8879
• State government websites for each state’s revenue department

This guide explains how the season works. It isn’t tax advice.

For more on running the season itself, see stress-free tax season, how to get information from clients faster and capacity planning for accounting firms.