10 Takeaways for CPA Firms from the previous tax season
The peak season has arrived, and accounting professionals around the country are preparing for what will undoubtedly be their most difficult period of the year. The 60-hour, six-day workweek may make for a frantic workplace. Young CPAs, on the other hand, may survive and even prosper during this era if they properly manage their time by making efforts to reduce their stress levels. Tax files and payments are a necessary part of doing business, so it’s no wonder that the 2021 tax season was full of twists and turns as firms struggled to negotiate substantial tax reform changes, natural disasters, and smart tax planning methods. We witnessed a rise in the number of extensions due to the intricacies of the new tax legislation.
What do accountants do when tax season is over? During peak times, they really do the same thing: they work extremely hard for their clientele. The main difference is that, instead of churning out tax statements, they assist customers in addressing other parts of their economic health, including difficulties that surface during the annual tax return process. That’s why the best time to discuss any takeaways or questions with your accountant is shortly after tax season, while everything is still fresh in your memory. Some instances are as follows:
Is It Possible To Lower My Tax Bill?
Your accountant can assist you in determining where you may save money on your taxes. Investing in an individual retirement account is a popular choice. Consult your accountant to determine whether this is a viable plan for you, and if it isn’t, look for other methods to save.
What’s The Best Way For Me To Deal With [Insert Tricky Tax Situation Here]?
If your tax status is more complicated than the fundamentals, an accountant can help you plan your finances effectively for the following tax season if you have just had a big life event, such as adopting a kid, getting an endowment, owning rental properties, or having complex assets.
If you own a business, you may have extra concerns, such as:
Is The Business Structure I’m Employing Still Correct?
If you own a company, it may be time to switch to a different structure that offers greater benefits to your position. You may have started out as a sole proprietor, but your business has expanded to the point where a limited liability company (LLC) or S-corporation is a better match. Your accountant can assist you in weighing your alternatives.
10 Takeaways For Cpa Firms From The Previous Tax Season
According to a new behind-the-scenes study of accountants and tax professionals, the 2021 tax season should be revisited to evaluate where our customers started, how they managed these changes and hurdles, and how they came out on the other side. We discovered several similar threads throughout our clients’ experiences, which was not surprising.
Our clients have gone through a lot in the previous year, from acquiring an early knowledge of the implications of the new tax legislation to seeing a concrete cash difference on their bottom line. Here are our team’s top takeaways on what was most significant.
- It’s Best To Get Started As Soon As Possible
According to the IRS, this year’s filing was particularly difficult; IRS personnel had to put in extra effort to comply with new filing requirements. In the event of a review, the return that was not submitted on time would be delayed even further. If your client is filing a basic return, such as a W-2 with standard deductions, tell them to file it as soon as possible. If the return is complicated, you’ll want to do it as soon as possible.
- Get A Clear Understanding Of The New Rules
Many programs, such as the child and child care credit, the temporary increase in the child tax credit, the ARPA, economic benefit payments, and the special charity tax, saw revisions in the previous season. A CPA must continually stay on top of things, understanding changes to guarantee that taxes are submitted correctly. Only a firm with a thorough understanding of the laws can explain them to clients. As an accounting business, you must constantly be prepared to respond to legislative changes.
- To Make The Process Easier, Automation Is Used
Data collection from customers through tax organizers, data input, and work allocation have all seen a rise in automation in recent years. It allows tax preparers to work less, take on more customers, and give better service to their clients. Accounting companies may spend more time on more complicated topics like tax planning and comprehending new regulations or processes if they implement practices like e-filing with customers and direct deposit settings.
- The Timelines Are A Little More Lenient
This is something we’ve seen throughout the previous few years. The deadline is stretched to the next working day if it falls on a weekend or a national holiday. This is exactly what occurred this year. Because of Emancipation Day, the deadline was moved up to April 18 from April 15, and the deadline was moved up to April 19 in Maine and Massachusetts.
- It Is Critical To Plan Ahead
Planning becomes increasingly more crucial as new laws or adjustments to existing ones are implemented. When CPA companies employ outsourced tax preparation services to prepare for their return filing, they have more time to analyze the financial position and devise methods to reduce the tax burden, increase cash flow, and meet the financial goals of individuals and businesses.
- Any Company’s Foundation Is Built On Strong Partnerships
People are the clients of CPA firms. Their primary goal is to assist individuals who require financial support. These services become even more important in situations like these. Clients rely on these businesses for anything from a simple explanation of a programme or clause to submitting taxes. For things to go well, you need a solid, open partnership.
- Communication Skills Are Essential
This might be a continuation of the previous point. Strong connections between clients and accounting software outsourcing services are built on communication. Firms may readily get customer data with a robust communication system, and clients can express their concerns and seek clarification on issues that are important to them. Another factor to consider is the communication medium. To serve multiple clients, a company’s staff should be able to use a variety of tools, such as instant messaging, emails, phone calls, and video chats.
- Virtualization Is The Way Of The Future
This is another benefit of technology that CPA companies have been embracing for a few years, similar to automation. The use of the internet has grown commonplace. Accounting businesses contain a plethora of data that must be effectively and safely kept and maintained. Cloud computing is used to do this. Cloud accounting has several advantages, including quicker and faster access, actual metrics, versatility, adaptability, time and cost savings, and so on.
- With Digital Marketing, Go Beyond Expectations
This one may appear to be unrelated, but it is not. It’s all about grabbing people’s attention and developing your customer base through digital marketing. A growing number of small businesses are turning to digital marketing to attract customers. This includes having a website, a Twitter account, or a LinkedIn account where accountants may share their accounting knowledge. It might be anything from tax-saving strategies to basic financial tricks.
- Outsourcing Will Help A Lot
Outsourcing’s value is now recognised by businesses. They can profit from accounting work delegation. Ninety percent of small businesses intend to outsource business services due to pricing, time savings, the ability to focus on critical tasks, and other factors. Accounting is the service that is most commonly outsourced. Many large and small firms have outsourced tax planning in recent tax seasons so that this complex topic may be handled by professionals.
Kmk Ventures Is Attempting To Make The Best Of These Tax Takeaways In A Potential Direction
KMK Ventures provides end-to-end accounting and tax solutions for CPA companies as well as corporations operating outside the United States. We will be your one-stop destination for all of your offshore accounting and tax needs. Our organization’s heart is our team. We take pleasure in keeping our team well-trained and updated so that they can provide our clients with the best outcomes possible. Our team’s biggest takeaway is that this new tax landscape offers a lot of potential for businesses to make genuine, lasting changes, and it all starts with upfront planning, ongoing communication, and a trusted and dedicated tax adviser who is well-versed in tax law.
Many of our clients have had one-on-one meetings with our staff after filing their returns to examine their strategic and non-financial issues in order to position themselves for success in the next few years, which our advisers strongly suggest. In the 2021 taxable year, it’s expected that companies and individuals will still be adjusting to the numerous tax reform changes, so it’s never too late to assess your business operations to see how you and your company may take advantage of the new tax environment.