The Tax Cuts and Jobs Act (TCJA), the massive new tax law enacted in the waning days of last year, opens up a vast array of new tax-saving opportunities for taxpayers. Both individuals and businesses can profit from the tax code overhaul. Accordingly, the reform legislation could lead to an unprecedented revenue stream for CPA firms.
But just like the ‘49ers relied on pickaxes and pans to dig for riches, tax practitioners need to find the right “tools” to cash in on this gold rush.
Fortunately, you don’t have to prospect completely on your own. These days, there is a wealth of resources you can access, from goods and services offered by reputable providers to information and products available online to internal practices that flow down to the bottom line.
Technology is at the forefront of the new gold rush. Susan Tinel, an EA who heads up a firm in San Diego with a mix of 200 business and individual clients, realizes the importance of the latest innovations. “You want to avoid the pencil-and-paper scenarios,” she says. “Rely on the software that is readily available, and use every bit of technology you can.”
Tinel further advises tax professionals to communicate with clients to educate them about the new law. “You need to build a better rapport with clients. Have conversations with them so they understand what’s at stake.”
She also points out that firms must now interview clients more thoroughly. “Ask questions you haven’t asked before; drill down deeper,” suggests Tinel. She believes an in-depth client profile is an essential part of the process.
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Interestingly, Tinel is pruning her client list in the wake of the TCJA and growing it in a more profitable manner. She is now more selective about the new ones she takes on than she was before the advent of tax reform.
The reliance on technological tools is echoed by Francis Varrone, CPA. He is the owner of a firm in Montville, New Jersey, that has about 250 clients, mostly small business owners and individuals.
“Software, Hardware and Cloud services are the tools needed to do today's job,” says Varrone. “With the complication in preparing most returns, all of these tools are necessary."
He adds that software is critical to enable you to have these tools at your fingertips. Most of the large tax software companies provide a suite that organizes the firms internally. He draws an analogy we can all relate to.
“Hardware has taken a chapter out of our kitchens. Years ago, we had an oven. Now we have an oven, toaster, toaster oven and microwave. In the accounting business, we used to have a calculator. We now have a computer, iPad and a smartphone, all of which are necessary to accommodate the fast pace of our clients in providing quick and accurate advice.”
Finally, the Cloud Services has picked up the pace even faster, concludes Varrone. “With the portals and other cloud based service, we can obtain a client's information at the drop of a dime.” He sees these tools as being vital to a successful practice.
Of course, tax professionals must also caution clients about some of the potential pitfalls in the new law. Tinel believes in presenting a balanced viewpoint. “Clients are losing miscellaneous deductions. Single filers who are itemizers may be hurt,” she notes. “In the end, some are winners, some or losers and some stay the same.” This reemphasizes the importance of informing and educating clients.
In summary, clients will be relying on your expertise more than ever as the end of the year rapidly approaches. This is your chance to shine and maximize profits.
About Ken Berry
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 wide variety of newsletters, magazines, and other periodicals.