Every year, tax laws goes through a fluctuation of change. Whether they’re being altered, added, or removed, tax laws are a complexity that every accounting firm needs to stay on top of in order to keep their clients’ businesses up-to-date and compliant.
However, there’s no doubt that the complexity of tax laws can become overwhelming—especially as firms enter busy season. With so many different areas that cover income, corporate, excise, luxury, estate, and property taxes (just to name a few), it’s imperative that firms know the legal rules and procedures governing how federal, state, and local governments calculate the taxes their clients owe.
To ensure that your firm and staff are knowledgeable about the latest tax law changes, here are a few ways to stay-in-the-know not just for busy season, but all year round.
Go to the Source
Although congress is the one that passes tax laws, it’s the Internal Revenue Service (IRS) that actually enforces these laws across businesses and organizations. Thankfully, the IRS normally always provides a good summarization of tax law changes that have gone into effect, along with a comprehensive list of all related topics. They also provide plenty of resources and tools for tax professionals.
Check in with your state
State governments also regularly alter their tax laws to address varying issues that affect small, medium, or large businesses. There can also be updates on forms and other areas of legislation. Track these changes by checking in with your state’s Tax and Accounting boards for in-depth summaries and general information.
Subscribe to the AICPA
The AICPA (American Institute of CPAs) obviously takes standards and accounting changes very seriously. Make sure your firm and your staff are subscribed to the AICPA’s newsletters that breakdown tax law changes whenever they go into effect and also when/what to expect when they do.
Update your tax software annually
Many tax software have new editions that come out yearly which incorporate changes to federal and state tax codes. This way you’re not scrambling to manually input the changes yourself, and there will be less confusion as to which areas need to be updated or not.
Log in your CPE hours
Typically, CPAs take a minimum of 40 hours’ worth of continuing professional education each year. This requirement to maintain the CPA license is imperative for reasons such as this topic now: staying up-to-date with the ever changing landscape of tax laws, which must alter to adjust to the economic and social indication of the times. Make sure that your staff is complying with this requirement and check in to see which classes they are taking relevant to tax and accounting services. It’s up to CPAs and the firm to push them to study and understand new tax laws.
Hold frequent training sessions or group meetings
To make sure that everyone on your firm is on the same page, you can set up meetings or training sessions every few months or so to discuss any tax laws or regulation changes that have occurred. This can be helpful for those of your staff who may have questions to help further understand the changes and you can also all brainstorm on different ways you can let your clients know how it will affect them to avoid penalties or fees come tax season.
Be the resource; not the middle man
Although it is your job to help your clients file their taxes during Busy Season, it’s also equally important for your clients to know what tax law changes have gone into effect and how it will affect their businesses. They’re depending on you to be tax experts and professionals. They’re relying on you to effectively provide tax and accounting services and to be current on the ever changing laws and regulations, be it at the state or Federal level. With that being said, it’s extremely important that all staff members know exactly what’s going on and can relate that information to clients in a way that transitions the changes seamlessly.
Therefore, you want your firm to be the resource of tax laws and changes; not the middle man. You should be knowledgeable and ready to answer any questions your clients have regarding these tax changes rather than taking down their questions and going elsewhere to find out the answers and getting back to them later. This will continue to give your firm a reputation of competence and proficiency in the industry and profession.