How preparers prepare: Do-overs heading into a unique season

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“Fail to prepare and you prepare to fail” said the sage who never envisioned the Tax Cuts and Jobs Act. An overhaul of the tax system and seismic changes in clients’ expectations meant preparers had to be ready for anything heading into this season.

So, what did they overlook?

“We should have started earlier in improving my processes for tax season,” said Jeffrey Schneider, an Enrolled Agent in Stuart, Florida. “We did a lot for my representation practice, but started late for tax season.”

“[I] mainly [wish] that I had spent more time earlier on admin, organizers and so on, at least getting them ready to go earlier,” said CPA Brian Stoner in Burbank, California. “Because of other items I’ve just recently gotten them out, and with my new clients are still sending and emailing them ...”

“Actually, the start of the tax season has gone much more smoothly than I expected,” said Jeffrey Gentner, an EA in Williamsville, New York. “I did a lot of preparation early – lots of continuing education, in particular – in anticipation of all the questions my clients would have about the new tax laws.”

Better understandings

In previous years preparers’ do-overs ranged from insisting clients review withholdings earlier to allowing more time for clients’ endless questions during appointments. Reform, of course, only intensified such overlooked practices.

Some specifics of reform – such as the evolving regulations involving pass-through entities – offered bigger challenges than other parts of the TCJA, preparers said.

Melissa Bowman, an EA at Rainbow Accounting Services in Bradford, Ohio, wishes she’d run more scenarios using qualified business income in the software and by hand “to get a better understanding of the deduction as a whole,” she said.

“Definitely wish I had taken more continuing education classes on the new 199A deduction,” said Melanie Quint, an EA at Freeman Income Tax Service in Anthem, Arizona. “It’s quite complex and will probably take several tax seasons to really grasp the scope of it all.”

For some, regrets haven’t landed this season. “I feel very good heading into this season because I’ve spent a lot of time preparing,” said New York EA Phyllis Jo Kubey. “I subscribe to multiple tax research services and participate in a lot of tax professional online forums, so I’m confident that if something new happens, I’ll hear about it. I’ve read the law and regulations and have taken many hours of continuing education on the new tax law.”

Morris Armstrong, an EA and registered investment advisor at Armstrong Financial Strategies in Cheshire, Connecticut, also reported no regrets. “I got up to speed on the new tax regulations, especially as they impact my clientele, got my systems in place and contacted my existing clientele,” he said. “Without jinxing it, everything really is going to plan.”

Ditto Debra L. James, an EA at Genesis Accounting & Management Services, in Lorain, Ohio. “We spent the past year reading and studying about the new tax laws, and getting comfortable with the implementation. We are as prepared as we can be. Nevertheless, we're still feeling a bit unsure of some things, but that is to be expected with so many changes!”

Planning ahead

Tech is the regret for EA Kerry Freeman at Freeman Income Tax Service (as it has been for many preparers in previous years). “We [upgraded] into a space that was over 2,400 square feet,” Freeman said. “With that move, we took the time to upgrade and increase computers, scheduling apps and networking. We fell a little short [upgrading] to a cloud server. The risk now is too great to finish the project until the end of the season so as not to have any unexpected downtime or loss of data.”

Foresight remains a solid defense as reform enters its second year. Gentner, for instance, pre-appoints clients a year in advance. “If I could change anything, I should’ve given myself a little more time with many appointments so I could adequately address client questions and give a more detailed explanation of how the changes directly affect them,” he said.

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