The Tax Cuts and Jobs Act (TCJA) may represent the biggest current growth opportunity for your firm, but it’s going to take some hard work on your part to reap the rewards.
Notably, you’re going to have to educate yourself about the new law, including all the “ins” and “outs” of the key provisions and then quickly turn around and educate your clients. What’s more, there’s not much time left on the clock.
Many of the strategies that will benefit individuals and small businesses must be implemented before the end of this year. Fortunately, there is a wide variety of “tools” at your disposal, including resources on the IRS, software and content from publishers and other educational options, including webinars and crash courses and training sessions. These can help you develop the skills needed to maximize the benefits under the TCJA.
Susan Tinel, an EA in San Diego with about 200 clients, recognizes the importance of staying current with the latest twists and turns, especially now that the TCJA has overhauled the tax code. “It will take five years for the IRS to provide all the guidance that is required under the new law,” says Tinel. “So you need to work on your study skills during this time period.”
In addition, Tinel stresses the importance of being patient with clients. Many of them have that “deer in the headlights” look when the new law changes are discussed. “You must explain some complex issues to connect with clients,” observes Tinel. She strives to lay out the rules in simple terms, whenever possible. She also advises to be careful about “talking over clients” who might not fully understand the consequences.
Finally, reinforcing certain traditional CPA skills can put you in good standing, advises Tinel. She advocates “going back to basics” and relying on technology to help cope with all the TCJA changes.
Conversely, she notes that CPAs are leaving the profession in droves, especially those who haven’t kept up with the new technology. You’re going to have to make that commitment to develop the skills needed for the future.
Frank Varrone, owner of a CPA firm in Montville, New Jersey, breaks down the process down into three phases:
3. Making the right changes
“First, all CPA firms need to implement the 2018 tax law provisions and see what clients will be affected. Then firms must communicate with the appropriate clients and make them aware of the changes that will affect their tax consequences. Lastly, after the firms have communicated with their clients, they will have to make changes that are necessary for each client's plan.”
It’s the last one that is the hardest past, says Varrone. “Every client is different in a way that the corporate changes may also affect their personal interest,” he adds.
Of course, Varrone acknowledges that the CPA firms will only go as far as their knowledge takes them. He mentions that they will likely have to send their staff for more training, including CPE (continuing professional education). He suggests that firms hold in-house CPE classes or join the chapters in their state. “These are very helpful most times because they become round-table discussions,” concludes Varrone.
The time to act is now to take advantage of the opportunities available under the new tax law.
Additionally, you can lean into sources such as the Intuit ProConnect Tax Reform Resource Center for tax reform news, training, and tools, like the QBI Entity Selector Calculator, to help you along the way.
Next Week: Tax Reform Tools for the TCJA
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...