The tax season has ended (at least for now!) and so it is a part of the job for accountants and business people to look back and observe the lessons learnt and mistakes committed.
But the last two years posed challenges that were beyond one’s forecast. COVID-19 brought with it consequences that made the work of CPAs nerve racking with unknown and sudden stressors of pandemic, extended tax deadlines and a whirlwind of economic stimulus legislation.
Remembering that not so distant past, we have brought to you an elaboration of the opportunities and challenges that the world and especially the US economy faced during the COVID-19 tax season.
Two much extended tax seasons
The IRS and the Treasury Department declared the extension for filing 2020 individual federal income tax returns from April 15, 2021, to May 17, 2021 and for filing 2019 returns the deadline extended to july 15,2020.
These extensions, though were given to provide relief to the taxpayers struggling to meet the original deadlines, gave CPA firms a real nightmare as they were already stretching themselves thin to keep up with the demand.
Besides, the Treasury did not extend the deadline for first quarter 2021 estimated tax payments. Hence preparers had to bear the burden of preparing 2020 returns to advise clients on how much they needed to pay for Q1.
What negatives pushed the tax season to the edge?
2021 got even more brutal for the accounting professionals as the operations of the IRS got hit by the uncontrollable factors from economic crisis to increasing market instability in 2020.
The unending task sheet of the IRS resulted into an uphill battle to deal with:
- Issues in staffing creaked and crippled the agency’s customer service capabilities.
- Usage of outdated technology wastes valuable time.
- Unprocessed paper tax returns and correspondence related to 2019 returns piled up.
- Congressional mandates to administer Economic Impact Payments (EIPs) and implementation of multiple provisions of the stimulus legislation was a constant pressure.
- Manual processing of the high volume of 2020 tax returns kept employees working throughout.
As a result, taxpayers and their accountants are still dealing with longer refund delays and longer wait times on the IRS’s toll-free numbers.
What positives did we miss out?
In the haste of facing the many negatives that the last two years imposed, we might have neglected positives – though a few – that the tough times unexpectedly brought.
- CPAs earned their trust back
Earlier not many believed in getting their accounting and taxation done by an outsider due to many reasons including lack of trust. The notion was that it will increase the expenditure unnecessarily and put company’s data at risk.
During the time of COVID-19, the understanding changed. Many businesses started turning to CPAs in 2020 and 2021 due to lack of knowledge of changing tax laws and inability to make out of the ongoing market conditions.
CPAs proved their reliability by providing guidance and remote services which helped many small and large businesses reduce cost, save time and perform taxation obligations efficiently.
- Geographical boundaries took a back sit.
Before the pandemic, business owners would never have imagined to have the majority of their workforce working from home including themselves.
But what do we see right now? The New Normal has resulted in 65% of the businesses having their employees working remotely and many will continue so after the pandemic.
This shift in working pattern is by no means a small transition. Virtual work had to be accepted which has led to a diverse work force and better integrations by the way of optimum utilization of technology.
So what did we learn?
- Improvisation in the work model much needed
Once the storm has passed, business owners should meet up with their staff and discuss challenges their organizations faced specifically and what hurdles stopped them from carrying out operations the way they were expected.
An analysis of remote working should be undertaken to know whether working from home is adversely impacting the performance of the company and if so then strategies must be experimented with to come up with an appropriate working model that suits the new normal.
- Befriending technology is A Must
Working from home has forced us to learn and use certain technologies on a regular basis. Future being all about automation, businesses must look into technology that can automate repetitive tasks such as collecting client documents, inputting data, delivering tax returns, or collecting e-filing signatures.
Befriending technology should be a must to better serve your clients and increase revenues.
- Arrange places for stressbusters
The last two years may have left you and your team burnout. But trying to just treat the symptoms will not be enough. Refueling your mental and physical energy levels require doing things that you enjoy.
The trick is to inject tasks in between your regular responsibilities that you love doing or that help you stay relaxed. One way can be to look for ways to automate, delegate or outsource the tasks that only consume your time and energy.
Talk with your colleagues about things other than work. Take a break and have a cup of coffee, chat with friends to take mind off from the daily hassles. Or just sit back and relax if you want!
Outsourcing all your accounting and taxation needs is a smart option as doing so takes the entire burden off your shoulders, leaving you a significant amount of time to ponder over the strategic and growth oriented aspect of your business.
Relig Solutions is one of the top remote accounting and taxation service providers with an experienced team of accountants and tax managers armed with complete market knowhow.
The last two years have proved to be a huge learning experience for all of us. We can never be immune to the future uncertainties but looking at the present, what’s quite certain is that doing all on your own will not help any more.
Partnering with an efficient remote service provider is a much better option for CPAs to handle the unending client requirements and tax season rush while staying sane at the same time!