Over the past month we have had the opportunity to talk with dozens and dozens of practitioners in California, Oregon, and Washington and one theme is prominent in the dialog. The busy season just completed was a particularly tough and draining one. It had all of the typical challenges plus some.
Yes, there were the typical challenges of new tax laws, codes, and processes. The tax season started a bit late. The hours, as always, were long. There was too much work to complete in the allotted time so, as has been the trend the last several years, more extensions were filed than anticipated. All the typical challenges that make tax season a drain, but also familiar and to be expected for a seasoned practitioner.
Navigating the Tough Season:
However, this year we heard of a new wrinkle that really wore down many practitioners and was unexpected: a significant increase in dialog with clients about changes to their taxes. The practice owners we have spoken with have attributed this to three key factors: changes to eligible deductions; changes to withholding; changes to the look of the forms and all the new attached schedules. Despite efforts to inform clients in advance, many still had little idea that several of the key deductions that limited their tax liability would not be eligible for their 2018 filing. In addition, the changes to withholding had a significant impact as quite a few clients who expected to get refunds were stunned to find out they actually owed more taxes than they had paid…even though they had paid their full withholding. Finally, even the more knowledgeable clients, who really pay attention, still needed some handholding to understand the changes to the forms and all the new attached statements.
This made for a real challenge in time allocation during tax season as far more clients than normal needed time with practitioners to discuss all of the changes they were seeing. It was also an emotional drain since for so many clients it was an emotional situation. All practice owners we have spoken with shared that they estimated time spent with clients increased by 40% or more. One practitioner estimated he typically had follow-up meetings or conversations with 20% of his clients during a typical busy season, but 90% of his clients required follow-up and explanations this year.
So, if you feel this past tax season was a particularly tough one, you are certainly not alone.
ProHorizons is a West Coast brokerage and consulting company focusing on tax and accounting practice sales, acquisitions, and practice development services.
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