We can’t argue the fact that the last tax season was unique, unexpected, and hectic. We barely had space to breathe, and it is already time to prepare for the tax season 2021.
So, how do experts succeed year after year? What can you do to overcome the fatigue and unpredicted changes of the previous tax season?
The first step is to prepare yourself for anything. There should be no situation that can catch you completely off-guard like in the previous year. To help you prepare for the tax season 2021, we have gathered four excellent tips.
4 Tips To Prepare For Tax Season 2021
Being forced to work in a particular setting, and still getting results was time-consuming and challenging. However, this tax season, you can prepare in advance to stay ready for various situations, such as remote working, accounting advisory, etc. This would help you succeed and file taxes without any complications.
1. Work Remotely
If there is one industry that has been slow in adopting remote working, then it is accounting. However, we saw that silver lining after the pandemic started. We now know that accounting firms are fully capable of working remotely. They experienced significant turbulence and still managed to get their tasks done. So, they can make remote working successful.
The only thing that might be pulling accounting firms back is the ability to implement the right technology. According to this report by SmartVault, 62% of accounting firms could handle the pandemic situation because they had the cloud technology to support them. From the 1,100 that they surveyed, it was revealed that most rely on cloud-based systems for document management.
This clearly infers that remote working is possible, but you need to power it through the right technology and tools. For example, QuickBooks Desktop hosted on the cloud is perfect to go remote. You get every feature of QuickBooks, which you can also access online. You can access data remotely in a secure manner.
Here are some other benefits of the cloud:
- Better uptime, up to 99.999%
- Improved app security
- Regular backups
- Disaster recovery
The only thing you need to keep in mind is your selection of the right cloud service provider. Your provider should offer cost-effective packages and efficient packages containing features like better uptime, automated backups, security monitoring, scalabilities, etc.
2. Offer Advisory Support
In 2020, there were more questions about taxes than answers. Everyone knew the situation, and every business had a series of questions. Only CPAs and accountants had answers to those questions. As a result, companies are now used to getting guidance from their accountant.
You can extend this advisory support to the next year as well. You can mentor your customers, help them overcome certain financial crises, enable them to make the right buying decisions, forecast cash flow, and simply help them survive these difficult times.
However, if you fail to add these advisory services in your package or on the website, your customers may start thinking it is standard and for free. To capitalize on this advisory support, develop a method or a strategy, and get the word out.
Remember that everyone has questions about the next tax season that you can answer if you come across any doubt. You can help your customers overcome the losses of 2020, eliminate overheads, and optimize costs. Just make the right plan, assess your knowledge in the area, and move ahead with the decision.
3. Understand the CARES Act
There are various sections under the CARES Act that may or may not be clear. For example, according to one provision, businesses have the right to claim their present losses on previous years’ income to get an immediate refund. This means that if you are going through a considerable loss in any particular year, you can go back and reclaim the tax of the previous year. Here’s the link to the form that you can use for this purpose.
Through the CARES Act, you also get a high deduction on charitable donations. This is included in the act to encourage more contributions from business owners. You can actually deduct approximately or up to 100% of the AGI (Adjusted Gross Income). This means subtracting your other deductions from the total income.
There’s another provision of above-the-line. This means that you can deduct up to USD 300 charitable income, which you have paid in cash.
Your customers still have time to make donations if they haven’t done it already. This would help them save on taxes.
As you prepare for the next tax season, be ready to automate. With the pandemic forcing us to move to 100% remote working, you need to move to automation. There’s no point in bothering your employees with labor-intensive, repetitive, and mundane data entry tasks. It would be best if you had a way to capture data automatically and process it.
With the right automation tools, CPA firms will gain the ability to access, process, and evaluate data much quicker than before. The errors in the system would reduce, and efficiency would improve. In fact, employees won’t have to spend an enormous amount of time on these activities. They would focus on more strategic roles, such as advisory. This means that your employees will spend more time with customers helping them and guiding them, rather than fixing the errors they made in books five days back.
The accounting landscape is transforming, and you need to pick pace. There’s no way you can get success if you keep functioning with old processes. Purchase some automation tools and streamline your processes, accounting activities, and customer experience.
Even with a series of challenges, every accounting firm is looking for success. The past year created multiple bottlenecks, and we understood how to get through them. But what now? What’s the next step? The intelligent action would be to prepare for the next tax season already. Start working on the above four tips, improve your productivity, reduce business risks, and move towards unprecedented growth.