Today's Features

New IRS Sec. 199A: 25 Million Hours of More Work – And It’s All Billable [New eBook]

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Here's how to seize the new opportunities.

By Stephen L. Nelson
Maximizing Sec. 199A Deductions

The new Section 199A deduction surely counts as both a “good news” and a “bad news” story—at least for tax accountants.

The Bad News First

The bad news about Section 199A? The new deduction, according to the Internal Revenue Service, annually requires 25 million (that's 25,000,000) hours of additional work for the tax returns of 10 million (10,000,000) small businesses and investors. Further, the statute and just the first wave of proposed regulations confront taxpayers with striking complexity. The statute itself takes ten pages just to describe a tax break for unincorporated taxpayers equal to 20% of their business income.  And the first wave–just the first wave–of regulations runs nearly 200 pages.

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A comparison puts this all into perspective: The Section 121 “Exclusion of gain from sale of principal residence” statute runs just five pages. The Section 121 regulations run 20 pages.  And this other reality: The Section 199A regulation relies on small businesses and their tax return preparers to perform good accounting: For example, accurate revenue and cost accounting by individual “trades or businesses” (a definition the statute and regulations blithely fail to supply), truly up-to-date depreciable property records, and then precise accounting for both W-2 wages and partnership guaranteed payments.

My honest guess? This first year unfolds as a slow-motion train wreck for many. Sorry.

But Good News Too

The good news about Section 199A? The flip side of the coin. Probably every small business and active real estate investor client you serve needs two to three hours of additional high-value tax work just to get the right deduction onto their tax return.  Further, your high-income and high-net-worth clients will probably each need additional hours of pre-year-end planning, coaching, and maybe just general accounting services. These services should save some of these folks tens of thousands of dollars a year–and let you bill at rates commensurate with the incredibly high value delivered.

Some accountants have even begun to whisper, “Section 199A will be like Sarbanes Oxley, but for tax accountants and small businesses.”

Given the bad news and the good news, what can a CPA or CPA firm do to prepare–other than learning this complicated new law really, really well?

I have five ideas to consider:

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Learning from Hurricanes Harvey and Irma

What disaster recovery readiness means for accountants.

By Donny C. Shimamoto

Think back just a short while agp when you first found out that Hurricane Harvey was poised to hit Texas. Or when you first heard Irma was about to hit Florida.

MORE: Focus on Cyber Risk, Not Just Security | Making IT Matter to Accountants | IT Nerds Need Budget Help | 8 Ways to Wrestle Software Subscriptions Into Submission | IT Hardware Gets Even More Complex (Great!) | How Accounting Geeks and Techie Nerds Can Play Nicely Together
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If a hurricane or other natural disaster were coming to your town would you know what to do to ensure that the damage and impact to your IT environment was prevented or minimized?
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Who Wants to Be a Comptometrist?

Dinosaur talking on a rotary phoneHint: You shouldn't. Here's why.

By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant

(With sincere respect to the erstwhile comptometrists.)

Only 16 out of over 500 million users of LinkedIn have “comptometrist” as the “past” title. And they held those positions from anywhere between 25 to 55 years ago!

MORE ON ENTREPRE-NEURIAL STRATEGY: Blockchain: Questions Are the Answer | The 7 Experiences Millennials Want from Your Firm | 22 Ways Blockchain Will Impact the Accounting Profession | Forget CPE, You Need an FPE | ‘Uberizing’ Means More Than Technology
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There are exactly zero comptometrists on LinkedIn today – and likely, in the world.
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Firms Only Grow When Partners Play Their Roles

Money tree growing in the middle of green meadowHow often are you seeing your clients?

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Whether you simply desire to improve your firm’s operations, or identify and implement a new long-term strategy, you need to be clear about the role that the owner(s), partners or shareholders should be playing in your firm.

MORE ON PERFORMANCE MANAGEMENT: How Big ‘Books’ Hurt Firms | How Small ‘Books’ Hurt Firms | Why the Partner Agreement Matters | Merging for the Wrong Reasons | Accountability Includes Partners | 7 Succession Questions to Ignore for Now | Develop Your Employees or Suffer the Consequences
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The roles and responsibilities we’ve suggested are based on the best practices we’ve had the opportunity to observe and be involved with in our work with CPA firms throughout North America.
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Cyber-Security: Finally, Something Better Than Passwords

Learn More

Tired of one-time codes? This could be your answer.

By Rick Richardson

Google might have just made itself the most significant example of how security keys can work better than other forms of multi-factor authentication.

MORE TECH THIS WEEK: Researchers Tap A.I. for More Efficient Road Maintenance | In Cybersecurity, Why Tokenization Beats Encryption | Smart Cities Rely on Public Cloud and Edge Computing | Amazon Offers New Delivery Service for Buildings | EY’s ‘Day One Ready’ Creates Needed Competencies of the Future | Your Next Bank Card Might Have a Fingerprint Scanner Built In
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Security keys like the one made by Yubikey give you a way to log into a website by merely plugging it in and pressing a button. You don't even need to type in your password anymore, much less generate a one-time code. READ MORE →

The W-4 Time-Bomb and What To Do About It

You don't want clients to blame you for any unhappy surprises.

By Barry J. Friedman, CPA
IndustryNewsletters

With so many recent tax changes, two-income families and people who work multiple jobs should check their withholding amount.

More Hot-Button Topics for Clients: Supreme Court's Wayfair Ruling on Sales Tax Sows More Confusion  |  Making Passwords Hack-Proof |

GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

The IRS is urging two-income families and folks who work multiple jobs to complete a paycheck checkup to verify that they're withholding the right amount of tax from their paychecks.

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[Free Webinar Today] 6 Essentials for Lead Generating Websites

CPA Trendlines teams with Capstone Marketing to produce a fast and focused 30-minute webinar, Tuesday, Sept. 18, at 2 p.m. Eastern on the 6 Essentials for Lead Generating Websites.

There is no charge for the webinar and no obligation. Learn more here

Hosted by Capstone's Jean Caragher, The event is designed for firms of all sizes, where attendees can learn from the best in the business, with exclusive insights from the newest research, and obtain guidance on instantly practical applications.

Participants get exclusive access to some of the most important findings from the new research report:  Gear Up for Growth: The Marketing Trends Manual for Accountants. Learn more about the new research report here.
Can't make the date? No problem! Sign up and you'll still get the recording and the handouts. (PS: Sorry, no CPE for this session.)

Don’t Blame Technology

Source: Sage

Accountant and client expectations are driving today's changes. Technology is only the enabler.

Warawa

By Jennifer Warawa
Executive Vice President - Partners, Accountants & Alliances at Sage

The world is changing -- that’s no surprise, especially to accountants. Conventional wisdom will tell you it’s new tech adoption that’s changing our field, increasing competition and altering the way we do our jobs. But is that what’s really happening? Not necessarily.

Accountants today are feeling more pressure than ever to stay competitive. At the same time -- accountants are expanding far past their traditional roles -- becoming more holistic business advisors to their clients and strategic partners with an ever-increasing list of demands on their time.

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Supreme Court Wayfair Ruling Sows Confusion – And Opportunity

The cost of compliance could be enormous.

By Barry J. Friedman, CPA
IndustryNewsletters

The Supreme Court has ruled that a company does not need to have a physical presence in a state to be subject to its sales tax.

It has long been the rule that a state cannot collect sales tax from a vendor that is selling products in that state, unless that vendor has a physical presence, called a nexus. However, on June 21, in a 5-4 decision, the Supreme Court swept away the nexus rule in South Dakota v. Wayfair, Inc., saying states could collect sales tax even if there is no physical presence.

The brick-and-mortar stores are happy with the ruling, because it levels the sales tax playing field. The states are ecstatic because they can collect more sales tax. But there are complexities, and no one is entirely sure how it will play out in the long run.

Who is affected?

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It’s Not Always about the Money

The true value in a prenuptial encounter.

By Ed Mendlowitz
Call Me Before You Do Anything: The Art of Accounting

Prenuptial agreements are essential in many situations, but it is always awkward for one of the blissfully in love parties to bring it up. Prenups consider the possible failure of the happiest thing in the two people’s lives.

MORE: Perception Becomes Reality | Call Me Before You Do Anything | Learning to Delegate: Slow is Faster
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A client once asked me to accompany his son to a meeting where the terms of a prenuptial agreement were to be worked out to make sure the son’s small ownership of the business could never pass outside of his blood line … or the father’s control while he was alive.
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Partner Agreement Issues Affecting Women

Two businesswomen sitting at table and talking in office courtyardThe biggest issue? How part-time partners are treated.

By Marc Rosenberg

Yes. Yes.  I understand that the title of this post may be offensive to both men (why do we need special rules for women?) and women (why do we need to be singled out – isn’t it a given in the 21st century that women and men should be treated equally?).

MORE: Mandatory Retirement: Pros and Cons (And Is It Legal?) | Partner Duties, Prohibitions and Grounds for Expulsion | Principals Who Aren’t CPAs | Why Non-Compete and Non-Solicitation Covenants Matter | Handling Pay During the Disability of a Partner | Why Voting Isn’t Such a Big Deal
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The good news is that I don’t see many partner agreements that blatantly discriminate against women.
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Get Found Online: Four Mobile SEO Tips

Man sitting on mountain and searching for mobile signalDo this BEFORE desktop SEO. Yes, there's a difference.

By Becky Livingston
SEO for CPAs: The Accountant’s Handbook

In late 2017, mobile search overtook desktop search for the first time.

MORE: 12 SEO Myths | Quick Tip: Accelerated Mobile PagesWhy You Need an SSL Certificate NOW | Why Tracking URLs Are So Important | What Goes Into a Buyer Persona? | What Is SEO and Why Is It Important?
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What does that mean for you as far as SEO? If your site isn’t mobile-ready now, you must make it a priority if you want to continue to get website traffic. READ MORE →