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Set engagements and expectations for next year |
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Address economic pressures that are top of mind |
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Advise on tax planning topics |
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Demonstrate your expertise this tax planning season |
As the year comes to a close, most accounting firms are guiding clients through the complexities of year-end tax planning. In the midst of this busy time, it’s important to think ahead and start preparing for changes that can bring longevity and success to your firm in the year ahead.
For the second in our three-part series on year-end tax planning, we’ll explore why it’s worth your time to think strategically about client engagements and expectations for the year ahead, and how to shift your business model to address your clients’ top priorities in an advisory capacity.
Year-end tax strategy #1: Set engagements and expectations for next year
Review your scope and pricing
Today, clients expect more from their accounting firms, and accountants need to make sure that their pricing model follows suit. This is important not only because of the value you can bring to clients year-round, but to address other pressures that come from increased operating costs.
If you reset your pricing to 20% higher, for example, you might lose a handful of clients but gain the bandwidth to better serve the ones who remain. Or, you might consider switching to a value pricing model. Use the year-end to communicate the scope of what you will offer in 2025 and what is expected in terms of billing in the year ahead.
Schedule anticipated client touchpoints
The end of the year presents an opportunity to determine client touchpoints for the year ahead. Often, clients end up running the firm because you are waiting on their data. However, by communicating predetermined touchpoints with your clients, you can eliminate uncertainty come tax season. Tell them what you expect from them (and when) to ensure they are “tax ready” for 2025.
Create consumable content on-demand
Take stock of the topics you commonly address with clients at year-end. From there, create on-demand blogs or videos on these topics that clients can consume in their own time.
Videos and online meetings can be a great way to explain more nuanced tax concepts. These recorded resources replicate your firm’s best practices and ensure that your clients can get their questions answered while saving you time.
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Year-end tax strategy #2: Address economic pressures that are top of mind
Cash flow
It’s not that people aren’t making money in today’s economic environment — it’s just that they may not be as profitable as they once were. With pricing increases, more and more businesses are thinking about having some kind of cash flow budget. Consider addressing this topic at year-end and in consumable content throughout the next year.
Staffing
We all know the struggle with finding and retaining staff. Clients are having the same issues with maintaining or growing their revenue with fewer people. Address this topic during year-end conversations and create 10-to-15-minute videos with tips that clients can consume on their own time during the year ahead.
Business transitions and succession
With more and more clients wondering how long they want to run their business, understanding how to build a succession plan is key. Think of creative ways to transition your business clients and have these tools readily available.
- There are many ways to position their goals from a tax perspective and implement a strong succession strategy. Both traditional and nontraditional transition plans are valuable conversation topics now and throughout the year.
Year-end tax strategy #3: Advise on tax planning topics
As you begin to shift to an advisory business model, it’s important to start looking at your clients’ taxes as a multi-year consideration. Broaden your year-end discussion to include advice that extends several years ahead and looks at the full picture by suggesting what levers to pull in various scenarios.
Tax Cuts and Jobs Act (TCJA)
Many of the provisions enacted by the TCJA are set to expire at the end of 2025. While most eyes are fixed on the outcome of the 2024 U.S. presidential election, if Congress doesn’t extend the TCJA, then nearly every American will be impacted by the sunsetting provisions. To help ensure taxpayers are aware of the changes, accounting professionals need to stay informed of any extensions that may arise and also the ramifications should Congress let the Act expire.
Democratic and Republican Party tax platforms
Given the opportunity for significant tax reform with the expiration of key provisions, both the Democratic and Republican parties are touting their tax platforms and have an interest in extending or making permanent several sunsetting provisions. Comparing both the Democrat and Republican Party platforms can shed light on the possible post-election tax landscape. This article takes a closer look.
Additional timely tax planning topics
Corporate Transparency Act
This went into effect on January 1, 2024. Firms should remind existing clients that their initial report must be filed by January 1, 2025.
Governments are requiring companies to do this because they’re trying to fight illegal activities, such as money laundering and tax evasion. Firms need to be aware of this and other nontraditional questions because clients will need to know it proactively — and they will be asking questions. As new info becomes relevant, start talking about what’s happening with your clients.
Digital asset reporting
As part of the Infrastructure Investment and Jobs Act (IIJA), the IRS issued final regulations regarding the reporting requirements for brokers of digital assets. These regulations are designed to align digital asset reporting with the existing standards applied to traditional financial services.
Under the new standards, brokers will be required to:
- Report gross proceeds from digital asset sales starting in 2026 for transactions occurring in 2025.
- Report tax basis information for certain digital asset sales made in 2026, beginning in 2027.
Broadly speaking, the regulations require custodial brokers to file Form 1099-DA (Digital Asset Proceeds From Broker Transactions) and furnish payee statements reporting gross proceeds and, in certain circumstances, adjusted basis on sales of digital assets affected for customers.
According to the IRS, the regulations are intended to make digital asset investors aware of their taxable transactions and to make those transactions more transparent to the IRS — which is why tax and accounting professionals must take time now to prepare and adjust their processes accordingly.
Demonstrate your expertise this tax planning season
To learn how to make the most of year-end tax planning and all the ways advisory services can transform how you serve your clients, check out our 2024 year-end tax strategy planning webcast. If you’re interested in expanding into advisory services, learn more about Practice Forward to strengthen your client relationships today.
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2024 year-end tax strategy planningJoin Shaun Hunley from Thomson Reuters and Business by Design’s Paul Miller to learn about the right tax strategies to help ensure your firm’s longevity and success in the years ahead. |
