Year-end tax planning strategies: Provide your clients with expert guidance

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Set engagements and expectations for next year

Address economic pressures that are top of mind

Advise on tax planning topics

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.   

To conclude our two-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 2024 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 2024. 

• 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.  

Consider educating your clients on the following timely tax planning topics: 

• Corporate Transparency Act. This goes into effect on January 1, 2024. Most clients will not be affected until 2025, but new clients with new businesses started in 2024 will have to file a report with FinCEN within 30 days. The report requires them to disclose beneficial ownership (people who own the company) and provide sensitive information. This will affect reporting companies, LLCs, and any business that files a document with the Secretary of State.
  • • Governments are requiring companies to do this because they’re trying to fight illegal activities like 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. 

• Employee retention credits. Lots of clients are amending their payroll tax returns because of cash flow issues and hoping to improve those issues through a tax credit. However, the problem is that there are credit mills that are also trying to qualify for the credit. Remind and educate clients of this credit and ask if they claimed it in the past because the IRS is starting to enforce it.

• Tax Cuts and Jobs Act (TCJA). Many of the TCJA provisions are planned to expire in 2025. Is it too early or is it the right time to start planning ideas for clients that will be affected by the provisions? Some provisions include an increase in tax rates (37% will increase to 39.6%) and the standard deduction will go back down. Tell clients that you are aware of these changes and that you will proactively reach out to them (rather than them calling you).

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 2023 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.

2023 year-end tax strategy planning Join 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. Watch webcast