Tax Regulation is Constantly Changing. Here’s the latest.
Tax regulation changes annually, but it happens to varying degrees. Some years see minor changes, updated guidance, and rulings that change how current legislation is interpreted. At other times, for even years at a time, the changes are dramatic.
Keeping up with the regulatory changes is a given, but the bigger problems are actually:
- Increased complexity
- Tightening controls and collection
- The immediate market conditions
These have increased the frequency and need of more complex tax instruments, such as carried interest, R&D amortization, executive compensation exemption and depreciation on special rules.
The results? More complex work, and more work, in general — requiring increased skill and expertise.
Over the past few years, the world has seen its share of dramatic changes. From the dangers of sickness, rippling effects of labor shortages and supply issues, to the further downstream issue of inflation — all of these events have affected the livelihoods of nearly every living person. Thus, these effects have impacted the tax code, particularly in America.
These changes have a compounding effect on firms
If left unchecked, accounting firms would see a cascading set of problems develop. Maybe you’ve noticed some of these issues already. For example, your firm was impacted by the immediate and unprecedented need for remote work. Then, inflation and shipping issues directly impacted your clients. Legislation followed, including the Inflation Reduction Act, which changes certain things about how you file taxes for your clients and how the IRS handles collections (e.g. more aggressively).
Again, if these problems aren’t addressed, it could cost your clients money — and cost you those clients.
How do you prepare? Here are a few ways:
- Read updates on the latest tax changes
- Address and understand inflationary challenges your clients face
- Ready your team and add talent experienced in both Federal and State tax matters
The Latest Tax Changes (in terms of actionable advice)
Being “up-to-date” is important, but only reading articles about lofty changes doesn’t necessarily translate into the day-to-day. Here are a few of the biggest changes which directly impact tax filings
- Remote work: While remote work isn’t absolutely necessary, it’s here to stay. And while states catch up, the potential SALT (State and Local Tax) changes are plentiful. Ensure your clients aren’t double-taxed or have paid the right additional taxes to the proper authorities to avoid an audit.
- Potential for increased scrutiny: One of the most talked about portions of the Inflation Reduction Act are funds tied to hiring new IRS agents. While this is earmarked for replacing a retiring workforce, paying for the bill’s spending is something to keep an eye on, in terms of potential increased scrutiny on small businesses.
- Tax savings and credits (with deadlines and complex rules): Many vehicles for businesses now exist, created over the past two years. However, nearly all of them have been extended and/or augmented to change up certain things. (Examples include Bonus Depreciation and the ERC.)
Adequate Staff, Trained on Tax Law, Alleviate Client Concerns
Knowing these things and having a team prepared to file accurate, timely taxes for your clients is a two-edged sword in reducing fear. On one edge, properly filed taxes sets the fear of scrutiny to the side.
On the other side, showcasing a detailed knowledge of tax planning strategies gives a verifiable return on the investment into your firm handling a client’s taxes.
Of course, there is a need for qualified individuals to handle the influx of your busiest time of year.
Add Well-Trained Tax Resources to Your Team
At SAPRO, we train and work with some of the most adventurous and talented people in the accounting industry. Are you in need of quickly-deployed resources that are fully capable of handling your clients’ taxes?
SAPRO has a Tax Center of Excellence, full of our brightest who understand both Federal and State Tax codes and who quickly understand the unique tax nexus of clients to help them properly file, avoid scrutiny, and reduce the burden.
If you’re ready to have resources at your fingertips, schedule a discovery call to find out more.