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by rick telberg
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america’s tax practitioners are in a swirl of fear, hope, and frustration as they recover from the irs shutdown, present their clients with the realities of the tax cut and jobs act, and scramble to deal with new regulations, unobtainable irs forms, obsolete software, and inevitable filing extensions.
more on busy season: accountants worry for u.s. economy | tax shops bulk up for big busy season | busy season: the busiest ever? | survey: tax season launches with a whimper16 big questions for tax season | survey: tax accountants alarmed by tcja & shutdown | shutdown: what to tell tax clients during “the lapse” | beware the leeches and consultants | charitable giving under tcja | why padding tax deductions is a risky proposition | handling the delay in 199a regs | survey: clients rush for tcja answers|
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the 2019 卡塔尔世界杯常规比赛时间 busy season barometer is forecasting a profitable year, but the higher revenues are coming with higher anxiety.
karen facer-mee, head of facer, mee & associates, a small firm in warminster, penn., expresses several common concerns.
“we are at the end of the tax preparation process,” she says, “so if the beginning of the process (regulations and software) is delayed, then we suffer the consequences with the severe workload compression that the tcja and gov’t shutdowns have put on us. on top of that we are expected to do everything right, so we have much more litigation exposure due to lack of regulations and the time needed to analyze them.”
another small firm leader (who prefers to remain anonymous), expressed a similar concern with “potential liability from errors associated with issues concerning changes in the law….all of congress’s inability to act trickles down to us this time of year.”
that’s not the way trickle-down is supposed to work! and many preparers are worried that their clients aren’t going to see much trickle-back in their returns. a mid-level staffer named susan feels their fear.
“clients are not happy about losing their salt deductions and their 2016 expenses,” she tells us. “it is huge for the average person who spends a lot of their own money for work expenses.”
another small-firm practitioner says, “clients still don’t have a clue on the ‘bonus’ tax cut they ‘received’ last february that reduced their withholding. guess who gets the blame when refunds are less or they owe money? us!! we must have done something wrong for them to get a reduced refund or now owe money…”
kelly puryear, chief executive partner at trp cpa in fayetteville. n.c., prepared for the season by increasing seasonal help to deal with the 199a and by forewarning clients of an increase in fees for 1065s and 1120s.
but then, he says, “the shutdown put us behind because tax forms are not ready to file yet. we have numerous returns ready to file, but the forms are not approved yet.”
rod axtell, of axtell haller & slatchta, llc, in bloomington, minn., expects a much worse season due to the complications of new software for the office, new tax laws from washington, and the acquisition of another firm. still, he’s “cautiously optimistic.”
“the tax law changes will give us a significant opportunity to connect with clients,” axtell says, “and, hopefully, to be able to communicate our value as trusted advisors.”
that’s the spirit! when the going gets tough, the tough communicate their value. may the trepidations and tribulations of a turbulent year turn into opportunities to show the value of a good tax professional…and maybe an uptick in profits, too.
4 responses to “busy season: fear, hope & frustration”
katrina geety
the feelings of “fear, hope and frustration” are with the citizens of the united states on all fronts, including their tax returns that are delivering unexpected results. for the owner operator (truck driver) that is a statutory employee receiving a w-2 that is not able to deduct fuel, tires, repairs and other necessary expenses to the commissioned sales person, also a statutory employee, that can’t deduct travel, per diems and home office expenses, the removal of the 2% itemized deduction for employee business expenses is devastating. the irony is that there was a huge push for employers to reclassify subcontractors to employees to contribute the employer portion of fica and medicare taxes and provide unemployment and insurance coverage. and many employers complied, which relieved the taxpayer (employee) of this burden. now, the rug has been yanked from underneath their employee, once again leaving them with a huge tax burden. and the irs has advised against trying to report their income as a subcontractor income on schedule c so the expenses can be deducted. for 2018, they are an employee.
and then there is the salt issue which professionals are very aware of. so for the taxpayer in high income tax or real estate tax states, they may not be able to deduct a significant portion of them this year. this may allow them to claim the standard deduction on the federal, requiring a standard deduction on the state which is minimal, is responsible for increased tax liability to their citizens. and the taxpayer that received a large refund of state taxes this year for taxes paid during 2018 (4th quarter estimated) must be handled with care to calculate the taxable portion of the state refund.
the adjustment to the payroll tax tables in february 2018 put money into the pocket of many taxpayers through decreased federal tax withholdings. this, coupled with the aforementioned changes, is creating terrible results for taxpayers that normally get refunds, often “savings account size refunds”, to receiving a modest refund to owing. for my client base, the low to middle class taxpayer is suffering from the tax cut and jobs act 2017. upper income taxpayers are realizing a positive impact on their tax returns. in my opinion, in an attempt to rush a tax package through congress, the full impact of the changes, that were expressed by licensed tax professionals and advocated through the professional organizations, were not taken seriously. i fully expect that a modification to the tax cut and job act will be forthcoming because of the devastation it is causing to the citizens of the united states.
allen nahrwold
at the state level, arizona has not yet decided if they will conform, if at all, with the federal law changes. a decision may not be made until sometime this summer.
lynette r
i agree with michele, it was a slow start but now i find trying to explain the new laws to clients are taking a long time at the appointments, and now each appt is longer, leaving me to prepare after hours. i am not complaining, but i just didn’t realize that even though i prepared and notified clients, the new “simplified tax code” is not so simple.
michele eid
actually, this article gave me comfort that we are not alone. thought most of our problems stemmed from being in a small state. good luck to all of us this season.