10 Takeaways for CPA Firms From the Previous Tax Season
Every year the procedure for filing taxes remains the same, but at the same time, it becomes more evolved due to many advancements such as digitization and changes in tax policies and provisions. As a CPA firm, it is of utmost importance for you to keep up with new developments and learn what it means for the future of taxation. In this article, we will discuss some of the takeaways from the previous tax season.
Takeaways for CPA Firms
1. The sooner you start, the better.
As mentioned by the IRS, the filing this year was a tough one; the IRS employees had to work more to deal with new filing requirements. In cases of reviews, the return not filed on time would take even longer.
If your client is filing for a simple return like W-2 with standardized deductions, then advise them to file it without delay. Similarly, if the return is complex, you’d want to do it as soon as possible.
2. Get a good grasp of new provisions
The previous season witnessed changes in many schemes such as child and dependent care credit, temporary expansion of child tax credit, ARPA, economic impact payments, and special charitable tax. A CPA always has to be at the forefront, navigating the changes to ensure that returns are filed accurately. A firm can explain these to clients only when it has a sound knowledge of the laws. As an accounting firm, you always have to be ready to adapt to the changes made by lawmakers.
3. Automate to make things easier.
Automation at initial stages for processes such as data collection from clients through tax organizers, data entry, and task delegation has increased over time. It helps tax preparers reduce workload, take up more clients, and provide better services to clients. If accounting firms adopt practices such as e-filing with clients and direct deposit setups, they can spend more time solving more complex issues such as tax planning and understanding new policies or procedures.
4. The deadlines are flexible.
This is something that we have witnessed over a couple of years. If the deadline falls on the weekend or a legal holiday, the due date gets extended to the next business day. This is what happened this year, the due date was extended to April 18 from April 15 because of Emancipation Day, and in Maine and Massachusetts, the due date was April 19.
5. Planning is crucial.
With the introduction of new provisions or changes in previous ones, planning becomes even more important. When CPA Firms use outsourced tax preparation services to plan for their return filing, they even get more time to understand the financial situation and find strategies that can help minimize tax liability, maximize cash inflow, and achieve individual’s and firm’s financial objectives.
6. Strong relationships are the backbone of the business
The CPA firms work for people. Their main motive is to serve clients who need assistance with financial matters. In uncertain times these services become more vital. Clients rely greatly on these firms for their every small need, from an explanation of any scheme or provision to filing returns. A strong, transparent relationship is necessary for things to work smoothly.
7. Communication is key.
This can be an extension of the last point. Communication is the foundation of strong relationships between clients and tax preparation outsourcing firms. With a good communication system, firms can get the client data easily, and clients can convey their concerns and seek explanations for matters they find pressing. Another thing that matters is the channel of communication. The employees of a firm should be able to use all kinds of means like instant chatting, emails, calls, and video calls to cater to various clients.
8. Secure cloud computing is the future.
Like automation, this is another benefit of technology that CPA firms have been using for the past few years. Now, online activities have become mainstream. Accounting firms have myriads of data that need to be stored and managed efficiently and securely. This is done by cloud computing. There are many benefits of using cloud accounting, such as easier and faster access, having real-time metrics, flexibility, scalability, time and cost-saving, etc.
9. Digital marketing takes you places.
Now this one may look a little irrelevant, but it is not. Using digital marketing is about getting people’s attention and expanding your clientele. More and more small firms are embracing digital marketing to attract people. This includes having a website, a Twitter or LinkedIn account where accountants share expertise related to accounting. It can be anything from tax-saving tips to simple personal finance hacks.
10. Outsourcing will go a long way
Businesses now realize the power of outsourcing. They can benefit from delegating accounting tasks. According to Clutch, 90% of small businesses plan to outsource business activities because of cost-effectiveness, time-saving, ability to focus on priority tasks, and much more. Clutch also says that accounting is the most outsourced service. In the past few tax seasons, many big and small businesses have outsourced tax preparation to India so that this intricate matter is dealt with by the experts easily.
With every new tax season, there are lessons to learn so that we can do better in the future. These were lessons from the previous session that will hopefully answer some of your questions about current tax practices. If you want to dive deep into accounting or get the benefits of outsourcing your CPA Firms work, then CapActix is the right partner for you. We provide Accounting and Bookkeeping, Audit Support Services, Tax Preparation, CFO, Business Analytics, and Accounting Software Consulting services with the help of our expert, tech-savvy team. Visit our website for more details regarding our firm. Contact us at +1 201-778-0509 or reach out at [email protected].