Is tax season getting harder?
Plus: Alternates to QuickBooks | IRS proposed rule changes
Sorry to break it to you, but accounting, tax, and business regulations aren’t getting any simpler. The good news? We have updates today on some new tax laws, tech trends and options to help your clients lower their 2024 tax bills if they never got around to scheduling their tax planning appointment in Q4. Let's dig in.
In Today's Newsletter:
Q&A: How to prepare clients for the sunset of TCJA provisions
Secrets to firm growth in the coming year
Best tools for clients who can’t (or won’t) use QuickBooks
IRS proposes rule changes that could reshape practice standards
What you need to know about 2025 tax law changes
Staying ahead of upcoming tax law changes is a big part of the job for accountants and bookkeepers. That’s why we were thrilled to chat with Chris Rivera, CPA and founder at The Ecommerce Accountants, who shares his take on the tax changes accountants should be aware of as we head into another filing season. These include the sunsetting of key provisions under the Tax Cuts and Jobs Act (TCJA) and the strategies accountants can use to help clients prepare.
What are the most significant tax law changes or updates for 2025 that accountants should be aware of, and how might these impact individual and business clients?
Many tax benefits introduced by the TCJA are set to expire after 2025. These include lowered individual tax brackets, increased standard deductions and the cap on state and local tax deductions. Without new legislation, these changes could result in higher tax burdens for individuals and businesses.
Lawmakers may introduce updates to extend or modify existing tax laws, including the possibility of making some TCJA provisions permanent. Accountants should monitor developments closely to prepare clients for potential tax planning opportunities.
How should accountants approach advising clients on tax strategies to navigate the sunset of provisions under the Tax Cuts and Jobs Act (TCJA)?
With TCJA provisions scheduled to expire, it’s important to help clients take advantage of current rates and benefits. Strategies could include accelerating income or deductions into 2025, recognizing capital gains earlier or making significant charitable contributions. The current estate tax exemption is set to decrease after 2025, which could subject more estates to federal taxation. Advising clients to maximize the higher exemption through gifting strategies now can reduce future estate tax liabilities.
Are there any new compliance or reporting requirements for 2025 that could pose challenges for accountants or their clients?
There are a couple of new things to be aware of in 2025. Annual IRS inflation adjustments will impact tax brackets, standard deductions, and retirement contribution limits in 2025. Accountants need to stay updated on these changes to ensure accurate filings and planning. With increased IRS focus on digital assets, new reporting requirements for cryptocurrency and related transactions may emerge. Keeping clients informed about compliance expectations is essential.
Accounting influencers share what’s hot for growth in 2025
In the last few years, many firms have expanded their business advisory services and focused on niches like medical practices or hospitality. But is specialization the only path to profitability in 2025? At the recent Accounting Meta Influencers roundtable event hosted by Avalara, industry leaders shared their thoughts on how firms can thrive in the accounting profession as it continues to evolve. What came up? Leveraging technology, building stronger client relationships and adapting to changing regulations. Some of the most important takeaways include how important it is to integrate AI tools, streamline workflows and stay ahead of trends to drive efficiency and growth.
Why it matters: Accountants have positioned themselves as trusted advisors for decades. By expanding into advisory services, accountants can make good on this promise, help clients reach their goals, and grow their own businesses. (CPA Practice Advisor)
Decrypting crypto
Can tax pros handle their clients’ cryptocurrency tax issues themselves? Or should they partner with specialists? That’s the subject of a recent Federal Tax Updates podcast episode. Hosts Annie Schwab, CPA, and Roger Harris, EA, sit down with crypto tax expert Amir Marmar, CEO at JFDI Accountants, to unpack the complexities of cryptocurrency taxation. Marmar breaks down the latest developments tax pros need to know, including the wallet-level reporting requirements coming in 2025, decentralized finance, staking transactions and why traditional tax software might not cut it for complex crypto cases.
Why it matters: The IRS is tightening its grip on crypto compliance, and new guidance like Rev. Proc. 2024-28 means moving away from universal accounting methods. Accountants need to understand crypto tax issues to inform their clients, and this episode can help keep your firm ahead of the curve. (Federal Tax Updates)
What we are keeping an eye on: Clients looking for an alternative to QuickBooks? Jamie Trull, CPA, knows and loves QuickBooks Online. But for every QBO training video she posts to YouTube, she has dozens of people looking for other options. Trull shared her top picks.
What we think you should know: It’s not to late for your clients to lower their 2024 tax bills! The Tax Speaker newsletter has a breakdown of retroactive deduction opportunities for 2024.
Watch out: Online selling is risky business. Clients often aren’t aware that using Amazon and other third-party logistics providers can impact their tax compliance. A recent Talking Tax podcast episode highlighted the complex and inconsistent court rulings and potential risks of retroactive tax liability.
Who inspires you? Ace Cloud Hosting has a roundup of industry leaders sharing their sources of inspiration.
$2.4 billion |
The estimated amount of automatic payments the IRS plans to start sending out later this month to eligible taxpayers who didn’t claim the Recovery Rebate Credit on their 2021 tax returns. (IRS) |
- Tax Extensions: Why clients may need extra filing time
- Intellectual Capital: Why tracking intangible business value is a must
- Economic Optimism: CFOs predict a brighter financial future for 2025
- Top-Down Sabotage: Could it be happening in your firm?
- 2024 Lessons: Valuable insights to bring into 2025
Major changes proposed for Circular 230
The Treasury Department and IRS proposed sweeping amendments to Circular 230, and this could be the biggest overhaul of the rules governing those who practice before the IRS since 2014. Updates include revising the definition of “practice before the IRS” and eliminating provisions related to registered tax return preparers, reflecting the fallout from the Loving v. IRS decision. The proposed rules would also classify charging contingent fees for tax preparation as disreputable conduct — a move that’s sparking debate among practitioners.
Why this matters: The proposed changes could fundamentally reshape the tax practice landscape. Accountants will need to adapt to stricter standards for technology and client data protection and reevaluate their fee structures and procedures for providing written advice. Concerned about the changes? Be sure to voice your feedback during the comment period at regulations.gov and search for the proposed Circular 230 amendments. (Insightful Accountant)
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The Net Gains is edited by Bianca Prieto.