Rounding out the year: How practitioners are serving clients for the rest of 2021

August 11, 2021 1:41 PM

There are still deadlines to come in 2021, but the second half of the year also offers accounting and tax professionals more time to straighten out other tax and financial priorities for their clients. For practitioners, one priority is clear: taking the lead.

“Clients are looking for us to be proactive. Many don’t know of all the changes in mid-season,” said Kerry Freeman, an Enrolled Agent at Freeman Income Tax Service in Anthem, Arizona.

So, apart from making sure they file (if they haven’t already), how are accounting and tax professionals serving their clients through the rest of 2021?

On the move?

“Tax planning and consulting are by far the biggest services we’re providing,” said Jonathan Curry-Edwards, a CPA and principal with the private client tax services team at Top 100 Firm Friedman LLP in New York. “With proposed tax rate increases to long-term capital gains and ordinary income, clients want to know how it will impact them and what can be done to plan ahead. Clients are also thinking about changing domicile to low- or no-income tax states.”

Business, as usual

“As I have business clients (especially S corps), [it will be] tax-planning services in November and December, plus bookkeeping review and finishing extended tax returns,” said Brian Stoner, a CPA in Burbank, California.

Asking for forgiveness

“They’re still needing assistance with the first and second Paycheck Protection Program loans and the Economic Injury Disaster Loans, and of course many lenders are wanting copies of tax returns,” said Terri Ryman, an EA at Southwest Tax & Accounting, in Elkhart, Kansas. “I’ve also had numerous general liability and worker’s comp audits brought in, more than normal. And we’ve had several new clients with businesses show up, so we’re trying to get them started out on the right foot, applying for payroll ID numbers, sales tax numbers, getting books set up and so on.”

Eye on Washington

“Consultations and tax planning relative to the individual income tax changes proposed by the Biden administration,” said James McGrory, a CPA and shareholder at Drucker & Scaccetti in Philadelphia. “Consultations in connection with possible acquisitions or sales of businesses in light of the proposed changes in capital gains rates, and working with high-net-worth clients, along with their estate planning attorneys and financial advisors, relative to possible estate and gift-tax law changes.”

Capital defense

The potential jump in the long-term capital gains rate is a planning priority as well for Bruce Primeau, CPA and president at Summit Wealth Advocates, in Prior Lake, Minnesota.

“We have clients with substantial positions in one or a few securities and, when sold, those securities could generate more than $1 million in capital gains,” he said. “It would be fantastic to know, with some certainty, whether Congress will pass something that will increase capital gains taxes retroactively or just for those in 2022 and after.”

Small-business clients thinking of selling face a similar potential hike and don’t know what to expect, he added.

‘Amend’ to that

“We amended hundreds of Arizona returns because of tax law that changed on April 14,” Freeman said. “This change either reduced taxes due or created refunds.”

“Planning is coming in at No. 2,” Freeman continued, “with many new tax-law changes this year and lucrative new tax credits, many that are refundable. Helping clients keep in the correct AGI range is more important than ever.”

End of the game?

“We seem to have a run on clients who are strongly considering retiring instead of heading back into the office,” said Primeau. “Many of these clients have accumulated enough money to retire and are merely working because they enjoyed doing so. They’ve grown accustomed to working at home and have come to really like it and traveling back into the office just isn’t as appealing as it used to be.”