Soloist and Small Firms Taking It on the Chin this Tax Season

THE CPA TRENDLINES BUSY SEASON BAROMETER
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by Rick Telberg
CPA Trendlines

If you’re having one of the toughest tax seasons in years, you’re not alone. In fact, you’re one in an unusually large crowd.

Unless trends reverse in the last four weeks of Tax Season 2013, many practitioners – mainly those practicing solo or in small firms – should be bracing for significant declines in revenues and profits from last year.

TAX SEASON TRENDING:
BETTER or WORSE THAN LAST YEAR?

Some 64% of solo practitioners are reporting “worse” trends than last year, with half of them terming it “much” worse. About 16% are enjoying “better” trends overall.

To be sure, small firms may be feeling more than their fair share of pain. But many larger firms are hurting too. Among the largest firms surveyed, 30% are experiencing positive trends, with 50% reporting negative trends.

MORE BUSY SEASON TRENDS:

Practitioners across the nation are reporting severe issues. For one practitioner in Monroe, La., the season has been running “slow as molasses!”

For some, Tax Season 2013 may be the last straw. “Between the delays caused by the fiscal cliff, software delays and angry clients, it may be time for retirement,” says one veteran of 35 tax seasons and a partner in an 11-partner firm.

“All the IRS delays have put my clients in slow motion mode!,” says Liz Hegarty, an Austin, Texas, soloist. “My in-flow is down 25% but all that means is a really compacted ‘extension’ craze in April!   And I already have a crazy extension ‘season’ due to late K-1s.”

The latest analysis of survey data sheds light on key financial metrics, including trends in:

  • Revenues
  • Profits
  • Number of Clients
  • Number on Extension
  • Revenue per Client, and
  • Profit per Client

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