Accountants’ Top 10 Issues for Tax Season

CPAs brace for pain and uncertainty with cautious optimism, buoyed by signs the economy may have stabilized.

by Rick Telberg

As busy season lurches into high gear, accountants are expressing more confidence in the outlook for their own firms and organizations, buoyed by signs the economy may have stabilized.

Indeed, on a scale of one to five, with five being the best outlook for their organizations, accountants are reporting an average grade of 3.26, up a marked 20 percent from the year-ago 2.62 index level, according to CPA Trendlines research for the AICPA.

Top 10 Issues for Busy Season 2010
1. General economic situation
2. Setting aside enough time to plan
3. Staffing issues
4. Tax code changes
5. Personal or family issues
6. Technology/software problems
7. New accounting and auditing issues
8. New office, technology or software processes
9. Competition from others
10 Partner or office issues
Source: CPA Trendlines for AICPA

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Posted on February 16, 2010
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Just in time for tax season…

Show them how you really feel about busy season.

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A collage of the 1040 IRS Form printed throughout the whole roll. Available at PrankPlace here.

Or try their best seller:

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Posted on January 27, 2010
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Five Reasons You Can’t Stop Business Development during Busy Season

Make busy season into business development season.

“Firms need to look at the busy season as a stepping stone for 2010, while your clients are focused on taxes and accounting more than any other time,” according to John Ezell’s ProHorizons.

Here’s why you need a business development strategy in busy season:

  1. Accounting draws attention: The tax season is the time where you get the opportunity to meet your clients in person. Accounting is an important issue that, generally, captures an audience.
  2. Competitive advantage: Firms that make an effort at marketing during the busy season gain a competitive advantage over other firms who are not in the marketplace.
  3. Strengthened relationships: It is an opportunity to further strengthen relationships with existing clients.
  4. Increased referrals: Strengthened relationships will improve both quality and quantity of referrals.
  5. Accelerated growth: It offers opportunities to increase business and should not be wasted.

via Blog | ProHorizons.

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Posted on December 21, 2009
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Economy Weighs on Busy Season Outlook

Still, many CPAs see a better year ahead.

by Rick Telberg

CPAs appear to be headed into Busy Season 2010 with cautious optimism that this year will be better, or at least no worse, than last year’s, when the economy seemed to be careening out of control.

A survey of 151 professionals shows that 38 percent of respondents expect the 2010 busy season to be “better than last year,” compared with 22 percent who are bracing for one “worse than last year.” The rest, 40 percent, expect “about the same” according to the CPA Trendlines poll by Bay Street Group LLC for the AICPA Insider.

Michael Kelfer of Kelfer & Associates in Granada Hills, Calif., may not be typical of every tax practitioner when he reports a surge in referral business buoying his outlook for tax season. Yet, he’s wary. “I think the economy is still suffering and I do not see any relief in the near future.” His strategy is simple: “Service. Service. Service.”

Busy Season 2010: What to expect?

How to get ready?

Join the survey; get the results.

(Free. Confidential.)

Among those preparing for a more difficult year is Jerry L. Eden, at Eden, Sprowls & Co. in Elk City, Okla., which, he describes as “an area where oil and gas activity dictates revenue.”

Eden’s anxiety and anger surfaces easily when you ask him about the business situation. “The downturn seems to be leveling out, depending on what segment of the business world you’re in.” But he’s “not sure how things can improve substantially if jobs continue to be shifted to foreign countries.” Jerry is going to do what he knows how to do best: Focus on “continued hard work and knowledge.”

At this early stage of planning, it’s clear that the general economic situation tops the list of chief concerns this year, with 62 percent of practitioners mentioning it, followed by late or unprepared clients and getting up-to-date on the new tax issues.

Chief Concerns for Busy Season 2010
General economic situation. 62%
Clients late or unprepared. 48%
Getting up-to-date on new tax issues. 41%
Tax code changes. 38%
Setting aside enough time to plan. 30%
Late or erroneous K1s, 1099s, etc. 26%
Personal or family issues. 23%
Getting up-to-date on new office, technology or software processes. 21%
Finding good staffers. 20%
IRS operations. 17%
Partner or office issues. 17%
Making plans correctly. 16%
Technology/software problems. 15%
Competition from others. 12%
Getting up-to-date on new accounting and auditing issues. 12%

(Source: CPA Trendlines survey by Bay Street Group LLC for the AICPA Insiders)

As uncertain as the economy appears, and as difficult as it may be, accountants remain more optimistic for themselves than the economy-at-large or even some of their own clients. Only 12 percent rate busy season at all positively for the nation’s economy in general, with more than half (54%) expecting further deterioration.  Less than a quarter (19%) see upticks in the next few months for their clients and customers, but more than a third (39%) see declines.

That said, more than one in three (38%) accountants see improvements in their own firms and businesses, while less than one in four (22%) are bracing for tougher times. And, personally, when it comes to their own families and themselves, more than one in four (29%) accountants are optimistic for their economic lives at home, with 23 percent expecting conditions to worsen.

Terence Niewolny of White Bear Lake, Minn., doesn’t claim to be an economist or even to own a crystal ball. But he voices a common opinion when he says, “2010 will be fairly flat,” and the “economy won’t turn around until the second or third quarter of 2011.”

On the other hand, he’s still hoping to get enough business this tax season to put on some additional part time help. Let’s hope he’s wrong about how long it will take the economy to get going and that he’s right about needing more help this tax season.

Copyright 2009 AICPA
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Posted on November 16, 2009
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15 new client service opportunities for tax season 2010 [VIDEO]

If you’re not already scheduling meetings with tax clients for year-end planning, you may be falling behind.

The government’s massive response to the financial meltdown and business downturn is producing a volcano of changes in year-end tax planning and potentially new challenges when filing season starts in 2010.

We caught up with CCH tax guru Mark Luscombe at this week’s NASBA CPE Expo to get his thoughts on what accountants should be talking about with their clients today.

And we asked what kind of headaches tax professionals can expect for busy season.

Here’s more, a few excerpts from his slides, listing 15 items for individuals alone:

Eight  New 2009 Year-End Tax Planning Tips for Individuals

  1. Making Work Pay Credit (Watch out for under-withholding. Consider economic recovery payments)
  2. First-time Homebuyer Credit
  3. American Opportunity Tax Credit
  4. Qualified 529 Plan Expenses
  5. Exclusion for Unemployment benefits
  6. Madoff Losses
  7. Disaster Relief
  8. Plug-In Electric Drive Motor Vehicle Credit

Seven New 2010 Tax Proposals for Individuals

  1. Late changing rules, regs and forms through filing season
  2. Revised Saver’s Credit
  3. Restoring 36% and 39.6% brackets
  4. 20% cap gain and dividend rate
  5. Restore phase-out of itemized deductions and exemptions
  6. Limit tax value of itemized deductions to 28%
  7. New fees and taxes with healthcare insurance overhaul, including: (small business credit and surcharge on high-income earners)

Source: CCH

For more tips on client service opportunities in today’s market, click here to tune in to our Client Satisfaction and Retention webinar at 1 pm Eastern on Wednesday, October 7

What do you see as your biggest challenges and opportunities in the upcoming tax season? Tell us in comments…


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Posted on September 25, 2009
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Tax Season ‘09: CPAs Dodge a Bullet

Economy impacts end-of-season parties.

Are job cuts next? Join the survey; get the answers.

By Rick Telberg

CPAs closed out Tax Season 2009 last week feeling dazed, confused, weary and maybe even a little bit lucky.

Despite a dismal and dismaying economy, most tax practices were apparently bucking the recessionary downdrafts and mostly holding their own or even gaining ground.

So if you’re superstitious, kiss your lucky charm, knock on wood and throw some salt over your shoulder. Most CPAs seem to have dodged the economic bullet – at least for now.

In the last days of Busy Season 2009, 34% of 1,451 accountants surveyed were reporting better business than the year before, with 42% holding steady, and only 23% posting declines, according to the CPA Trendlines straw poll for the AICPA.

The 76% of CPAs reporting business as steady or better represents markedly stronger performance than 2008’s 66% or 2007’s 60% — making 2009 the best year for CPAs since 2006’s 81% net positive rating.

HOW WAS YOUR BUSY SEASON?

WHAT’S NEXT FOR THE PROFESSION IN THIS ECONOMY?

Join the survey; see the results.

(Free. Confidential.)

To be sure, many accountants are worried about their clients and about getting paid. And their busy season is getting longer with an ever-increasing number of extensions.

Furthermore, many firms will be scrambling in the coming days to re-fill a depleted business pipeline for the traditionally slow summer months. But in these recessionary times, CPA firms are generally among the survivors.

Still, CPAs are concerned. And you may be hearing about some significant reductions in force at a few firms whose fortunes are disproportionately tied to especially volatile segments of the economy, such as banking, housing or construction.

“The firm is firing or has fired 15 percent of its professional staff,” according to a senior partner at a major firm, which is forecasting no improvement in the economy until the second quarter of 2010.  “First our customers,” he says, “then our firm, will bounce back.”

At another firm — a mid-sized one — they hired additional staff going into busy season, according to a high-level partner, “which reduced workload and stress.”

“Now,” he adds, “we have to figure out what to do with everyone during the summer months.” He’s expecting some “slight” staff reductions and an intense drive “to replace lost revenue due to the economy.”

At a smaller mid-sized firm, they’re feeling the repercussions of their clients’ problems. “Clients were much more apprehensive about the economy” this year, according to one partner. And it’s easy to understand why when he adds, “We are seeing a 7 to 8 percent drop in revenue for our clients.”

Nevertheless, CPA firms are coming out of busy season relatively strong. The recession may have hit hardest during the accounting busy season, softening the blow. The vast majority of CPA firms are expecting to weather the recession intact and unmarred.

“The economic climate is rough and people are not happy,” says a senior staffer at a regional firm. But the “forecast is for slight improvement” with “no additional hiring.”

At Dauby O’Connor & Zaleski CPAs in Indianapolis, partner Ted Zaleski reports, “We expect to expand and add staff.”

Staying productive and positive may have been one of the biggest personal challenges through a tumultuous tax season.

But for Rich Levy at Levy & Associates in Fairfax, Va., his feelings of grace and gratitude come daily. “My office is upstairs from a kidney dialysis franchise,” he says. “It’s easy to stay positive when you see real adversity on a daily basis.”

NEXT QUESTION: Now that tax season is over, what’s next for accountants in this economy? Join the poll; get the answers.

Comments: Questions, ideas, rants or raves? Send email to Rick Telberg here.

Get my daily updates: Follow me on Twitter. (What’s Twitter?)

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Posted on April 20, 2009
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SURVEY RESULTS: Tax Season 2009 – Feeling lucky it wasn’t worse

Most practitioners did as well or better than last year, according to survey.

Here’s your sneak peek of the results, tabulated in real-time. As always, thanks to the participants for joining the survey panel. We’ll keep you posted

If you haven’t already joined the survey panel, you can do it now: join the survey; get the sneak peek updates


Compare these latest results to last year’s:

Add your comment here, then join the survey; get the sneak peek updates.


Related:

More:

[Research by Bay Street Group LLC. Data Copyright AICPA 2009.]

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Posted on April 19, 2009
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