LSA for tax preparation

Tax season brings stress and complexity to employees' financial lives. Professional tax preparation services can ease this burden while ensuring accurate filings and maximum refunds. Forma empowers organizations to support their workforce through customizable Lifestyle Spending Accounts that address real employee needs.

LSA for tax preparation: Professional tax assistance that reduces employee financial stress

What is an LSA for tax preparation?

An LSA for tax preparation allows employees to use their employer-funded account to cover professional tax services. These services include certified public accountant consultations, tax preparation software, filing assistance, and audit support. Employees can choose from various tax professionals and services that best meet their individual circumstances, from simple returns to complex financial situations requiring specialized expertise.

The flexibility of Lifestyle Spending Accounts means employees can select the level of tax support they need, whether that's basic software for straightforward returns or comprehensive professional services for more complicated tax situations.

Can I get an LSA for tax preparation with Forma?

Yes, tax preparation services are typically eligible expenses under LSAs. Forma's platform makes it simple to include tax preparation as part of your employee benefits package. Our flexible system allows you to set parameters around eligible tax services while giving employees the freedom to choose providers that match their needs.

Offering tax preparation support through Forma demonstrates your commitment to employee financial wellness beyond traditional benefits. This support helps reduce the anxiety and time burden that tax season creates, allowing employees to focus on their work while ensuring their personal finances are handled professionally. The benefit is particularly valuable for employees with complex tax situations, multiple income sources, or those who simply prefer professional guidance.

Why choose an LSA for tax preparation?

Reduce employee financial anxiety

Tax preparation can create significant stress for employees who worry about making mistakes, missing deductions, or facing penalties. Professional tax services provide peace of mind and confidence in accurate filing.

Support diverse employee needs

Different employees have varying tax complexities. Some need basic filing assistance while others require specialized help with investments, business income, or multi-state returns. An LSA accommodates these diverse requirements.

Maximize employee tax benefits

Professional tax preparers often identify deductions and credits that employees might miss when filing independently, potentially saving more money than the service costs.

Demonstrate comprehensive care

Supporting employees through tax season shows your organization values their complete financial wellbeing, not just their workplace compensation and traditional benefits.

How does an LSA for tax preparation work?

Step 1: Employer funds the account

Your organization allocates a specific amount to each employee's LSA that can be used for tax preparation services throughout the year.

Step 2: Employee selects tax services

Employees choose from eligible tax preparation options, including local CPAs, national tax preparation chains, or professional tax software that meets their specific needs.

Step 3: Employee pays for services

Employees use their LSA funds to pay for tax preparation services directly or submit receipts for reimbursement through Forma's streamlined platform.

Step 4: Simple administration

Forma handles the administrative details, tracking eligible expenses and ensuring compliance while providing transparency for both employers and employees.

What are the benefits of an LSA for tax preparation?

Improved accuracy and compliance

Professional tax preparers stay current with tax law changes and help employees avoid costly mistakes that could trigger audits or penalties.

Time savings for employees

Professional tax preparation frees up employee time during busy tax season, allowing them to maintain focus and productivity at work.

Enhanced financial outcomes

Tax professionals often identify overlooked deductions and credits, potentially increasing refunds or reducing tax liability beyond the cost of their services.

Reduced workplace distractions

When employees have professional tax support, they spend less time during work hours worrying about or researching tax questions, maintaining better workplace focus.

Increased employee satisfaction

Providing tax preparation support addresses a universal employee need, contributing to overall job satisfaction and demonstrating employer investment in employee financial success.

Supporting your team through tax season and beyond

Tax preparation support through an LSA represents a practical, high-impact benefit that addresses a universal employee challenge. By covering professional tax services, you're investing in your employees' financial confidence and reducing a major annual stressor. This benefit complements other financial wellness programs and demonstrates your organization's commitment to comprehensive employee support.

The flexibility of Forma's platform means you can tailor tax preparation benefits to match your workforce's needs while maintaining simple administration. Whether your employees need basic filing assistance or complex tax planning, an LSA provides the support they need to handle tax season with confidence.

Frequently asked questions about LSA for tax preparation

What types of tax services are eligible under an LSA?

Most professional tax preparation services qualify, including CPA consultations, tax preparation software, filing fees, audit support, and tax planning sessions. Employees can use funds for both federal and state tax preparation services. However, the actual tax liability or penalties are not eligible expenses—only the professional services to prepare and file returns.

Can employees use LSA funds for tax preparation software?

Yes, professional tax preparation software subscriptions and purchases are typically eligible LSA expenses. This includes popular software programs used for personal tax preparation, whether purchased directly by the employee or through a tax professional's office.

How do employees get reimbursed for tax preparation services?

Employees can either pay directly through Forma's platform when possible or submit receipts for reimbursement. The process is straightforward—employees upload their receipt showing the tax preparation service and cost, and reimbursement is processed quickly through the platform.

Are there limits on how much employees can spend on tax preparation?

Spending limits depend on your organization's LSA design and the total amount allocated to each employee's account. There are no federal limits specifically for tax preparation services, but employees are limited by their total LSA balance and any category-specific restrictions your organization may set.

Can LSA funds cover tax preparation for previous years?

Yes, employees can use LSA funds for amended returns or preparation of prior year tax returns, as long as the service is provided during the current plan year. This flexibility helps employees address past tax issues or take advantage of missed deductions from previous years.