How to Thrive After Another Challenging Tax Season

After the tax season we’ve all endured, as tax professionals you can take a few critical steps to ensure you and your firm are set up to thrive this year, and beyond. Here are three critical measures that you can take and even expand on post-busy season.

1. Stay in the Know

The most critical action a tax professional can take is to stay up-to-date on the latest tax provisions and what they mean for your clients. Understanding the nuances of the tax law implications can ensure your clients will have the best outcomes.

For example: understanding whether states are conforming for the exemption for unemployment compensation or how the Advanced Child Tax Credit for 2021 will affect your clients. These seemingly small details can have a significant impact for your clients, especially at a time when many need extra support.

It can be extremely difficult to stay on top of all of the changes taking place this year. But, there are many resources at your disposal. Here are just a few:

• IRS.gov: The IRS posts news alerts and valuable information on tax law explanations, the latest guidance and FAQs.
• Trade journals and Tax Trade Outlets: Journals and media focused on tax pros can be reputable sources to find the latest updates and analysis of key tax law changes.
• Blogs on Tax News and COVID-19 Resource Centers: The Intuit Accountants site, for example, is regularly updated with tax news, insights for professionals and their clients, and events, like webinars, that dive deeper into what tax professionals need to know to best help their clients.

There are also certain groups that will be more impacted than others, such as those with dependents and children. Additional provisions have been made for parents and children in this bill, including a large expansion to the child tax credit, dependent care credit and earned income credit for the 2021 tax year.

Clients need to be aware that they could end up repaying some of the advanced Child Care Tax Credit payment on their 2021 tax return – and need to plan accordingly. It’s critical to remember that due to relaxed requirements, it is possible for parents to claim childless EITC in tax year 2020.

By staying in the know on these details, tax professionals can ensure they are providing the best advice to clients.

2. Increase Insight Distribution

Out of necessity with the new legislation, the tax and accounting industry and the professionals within it have to lean more into advisory services. Now more than ever, clients need support in decoding and understanding what the tax law means to them personally, and how they can plan longer-term to reach better financial outcomes.

As you continue to stay educated on new information and how it could impact your clients, the next step is to ensure you are passing along this expertise. Show your client that you’re an expert on top of the new legislation by providing updates and insights via your broad-reaching channels.

Whether it’s your website, blog or an email newsletter, help translate legislation from technical jargon to layperson language. Communicating with your current clients – and prospective clients – that you are well-informed and can help them make the best decisions for their situation will put them at ease and increase their trust in you.

A key example of why these insights are necessary can be seen with the announcement of the delay of the tax deadline. While most of your clients may know that the deadline was extended to May 17 for many states, they may not understand what it means for them.

As a professional, you may want to consider having your client file the 2020 return as soon as possible if they had a child born in 2020.  Due to the new advance payment of child tax credit, the IRS will base the credit on the latest filing. By communicating this seemingly small detail, your clients will have the added benefit of ensuring the best return for the 2020 year.

3. Personalize

Take your counsel the extra mile by personalizing recommendations for your clients. You can follow up on newsletters with individual insights, proactively reach out to clients to discuss pain points, and more. In addition, taking the time to fill clients in on actions they can take for both the 2020 and 2021 tax returns will prompt them to think about financial updates to share with you and prepare them for more seamless upcoming tax seasons.

For business clients, personalization can be of the utmost benefit this year especially. Among paycheck protection program loans, the employee retention credit and economic injury disaster loans, it can be confusing for clients to understand what they qualify for, whether it’s best to apply for a combination of provisions or only one, or even how to use those provisions to ensure the most benefit for their business.

Following up with your clients to scenario plan and walk through the options, as well as how these programs could be best applied to their unique situation, will set your clients up for business success, and ultimately your firm will benefit from a partnership with the client moving forward.

Final Thoughts

This tax season has been a trying time for tax professionals and their clients alike, largely because of all the tax law changes and still having to do much of it remotely. The best ways to stay ahead of the game are to educate yourself, ensure you’re sharing key insights with your clients, and make time for personalized interactions. This will not only help your business thrive, but will also allow you to continue to build stronger relationships with clients.

Robin Gervais, EA, NTPI Fellow, Intuit Manager, co-authored this article.