Chocolate makes a bitter coffee taste sweeter. A dry wine brings out the flavors of a well-cooked steak. Good pairings make everything better.
The same can be said for the work you do. Pairing solutions with the challenges you face can improve the final result. And this certainly applies to the most recent tax season.
We asked tax practitioners about what they experienced this spring, and in this informal AICPA Tax Section survey, we found out pretty much what we were expecting: It was a demanding one.
By examining the busy season pain points and pairing resources that address these issues, you can find solutions to even the most pressing trials you faced.
If these issues sound familiar and you want to get a leg up on extension season and next spring, sign up for the annual post-tax season webcast, Tax Practice Quarterly: Hot Topics in Tax Practice Management, on May 9. You’ll learn practical strategies to prepare your firm for next year. It’s free for Tax Section members, and PCPS members can claim a 20% discount.
Tax reform implementation
No one should be surprised that tax reform played a major role in this season’s complexity, and in fact, it was the number one challenge for tax practitioners. Trying to stay abreast of the new rules and guidance while helping clients understand the effects of the changes was enough to keep many of you up at night.
It’s not like you weren’t prepared. Most of your pre-season time was spent learning the new laws. But that didn’t leave much room for anything else. And tax reform guidance continued to be issued throughout the season. It was a lot to take on.
Diving deeper, practitioners commented that their biggest challenges were effectively applying new tax provisions (most notably Sec. 199A) and ensuring that tax software provided the correct results.
Perfect pairing: Stay current on the tax reform news that affects your tax clients with information and tools found in the Tax Reform Resource Center.
Clients and the new laws
A majority of those surveyed expressed that their clients had varied levels of understanding when it came to their tax situation this year. Some clients were very prepared while others were taken by surprised. As noted by 32 percent of respondents, tax pros spent a lot of time explaining these changes to clients.
On top of that, practitioners struggled with the changes to the withholding tables that may not have adequately covered clients’ liability, with a majority expressing that their clients would benefit from the underpayment penalty relief waiver. (In March, the IRS expanded underpayment penalty relief to a threshold recommended by the AICPA.)
Not surprisingly, practitioners saw an increase in extensions filed this year compared to the previous years.
Perfect pairing: Post-busy season is an excellent time to engage your clients in discussions around year-round tax and planning topics. Learn how to take a holistic approach to your clients’ financial situation with the AICPA Planning and Tax Advisory Services hub.
Delays, delays, delays
Although the government shutdown ended before busy season really got into full swing, questions about what the shutdown would mean for filing returns, getting tax refunds and IRS support made for a bumpy start to the year.
Several respondents commented that the changes to the Form 1040 required more time to review tax returns and walk clients through them.
But delays extended beyond the shutdown and implementing the new forms. Almost half of surveyed practitioners voiced frustrations with software. Waiting for updates and fixes and enduring spotty software diagnostics added to this season’s complexity and caused delays.
Perfect pairing: Hear from other practitioners about how they juggle the practice management side of running a firm by attending the next AICPA Small Firm Update on June 27. And If you’re in a small firm, check out these resources tailor-made just for you.
Here’s the good news: there is no growth without struggle, which means you and your firm come out of this busy season stronger and wiser. Yes. It was a challenging season, but you not only handled your clients’ returns — you mastered them. Although busy season is in the rearview mirror, you know your work isn’t done. There are extended returns, lingering questions from tax law changes and mid-year reviews of your firm’s staffing and technology needs still on your plate.
Bookmark the AICPA Tax Section resource library, and check in throughout the summer. We’re working on resources and tools that can help you through the fall and hopefully make next spring season a little easier.
And don’t forget to register for AICPA ENGAGE happening from June 9 to 13 to take a deeper dive into the issues affecting you, your clients and your firm and learn concrete ways you can thrive in this ever-changing profession.
Busy season may be over, but you know what? We’re just getting started!