Accountants and income tax advisors were thrown through a loop last year when the coronavirus pandemic hit the start of the busiest part of their season.
They quickly adapted by hosting meetings with clients through Zoom, sending confidential information through secured portals, and making new economic programs meaningful.
Although it wasn’t easy, Frederick’s accountants are grateful for one thing: they are ready to do it all again this year.
“I think we’ll still have a lot of the same turmoil. The difference is that we’ll be prepared for it this year,” said Kevin Hessler, CPA and Principal at LSWG in Frederick. “Last year we got everyone to work remotely in a day or two. Now we’ve had a year to work on it to make things run more smoothly.”
Many accountants, like Barbara Keeney, also a CPA, have had to cancel all of the in-office appointments that are usually a mainstay of the sign-up season. Instead, their customers had to hand in files or email them, which Keeney said took some time to get used to.
Burt Speer said he had to get used to working on Zoom quickly and having customers send all of their files through a secure portal. While many people still prefer paper files and meet in person, the CPA said many customers were moving in a more electronic direction anyway. One advantage is that the files can stay in the portal for years.
“If I send my clients their 2020 tax return and they try to take out a mortgage in two years, they can just go to the portal and download it without having to find the old tax return,” said Speer.
Keeney said she didn’t schedule customer meetings in advance this year like she did in previous years, but she still gives customers the opportunity to meet in person if they want.
“We are entering the unknown at this point I think what will happen this year,” she said.
Although CPAs currently operate primarily as an online business, they have no need to worry that their customers might choose an online program like Turbo Tax in place of their services. According to Hessler, most of his clients have more complicated tax returns, and it’s usually more helpful to speak to a professional – even if it’s beyond Zoom – than doing it alone. Spear agreed, comparing it to when individuals seek other types of professional help.
“If your toilet leaks a little, go to the Home Depot and buy a part that you put it in,” he said. “But if you have a major plumbing problem, you should probably call the plumber.”
While there haven’t been many changes in tax law over the past year, CPAs recognize that once the new federal administration takes office later this month, they could quickly implement new tax laws. Hessler noted that while he keeps an eye on the news, he also keeps an eye on his customers.
“One of the things that I think is different now than it was a few years ago is that things can change in the blink of an eye,” said Hessler. “For example the [Paycheck Protection Program] changed several times. “
Speer said clients with installment sales that generate capital gains should also keep an eye on tax laws to see if rates go up or down before filing.
“Because if capital gains rates go up in the future, you may want to pay tax at the lower rate sooner rather than postpone tax to a year when capital gains rates are higher,” he said.
However, he urges taxpayers to forward their tax information to their accountants as soon as possible this year. While he’s not sure if the federal government will extend filing deadlines again this year, he thinks it’s a good rule of thumb to be prepared for it.
Keeney advised filing electronically whenever possible and setting up a direct deposit with the Internal Revenue Service (IRS). She said there are many tax returns that were not processed last year.
“When payments are due, it is best to do so directly as there are checks that the IRS has and has long had that have not yet been cashed,” she said. “The more you can do electronically, the better.”
Follow Erika Riley on Twitter: @ej_riley