As tax season gears up, preparers are helping clients navigate new laws, dealing with capacity constraints, and generally seeing more, and earlier, interest from taxpayers.
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For Sandra Johnson, CEO of Bellmore, New York-based Johnson CPA, this season is comparable to eight years ago.
“With the TCJA, I remember it was as bad as this then, not as much as past years,” she recalled, attributing the aggravation to new laws and a delay in getting instruction via the firm’s software.
“It’s frustrating that the instruction forms, we can’t access through the software, they are not done yet,” she explained. “We find clients take it out on us when that happens sometimes. That’s frustrating. We’ve grown to accept that it takes a while for forms to finish up with all the changes we’ve had the past year, and the OBBBA made it a little worse.”
New laws, old questions
The One Big Beautiful Bill Act is a common source of questions for clients of Boynton Beach, Florida-based Fishman Associates CPAs, reports principal Neil Fishman, including the legislation’s deductions like the tax credit for seniors, no tax on tips or overtime, and the car loan deduction.
“The really big ones have some impact,” he said. “I try to make clients aware. In November, I do a mailing to let people know about key changes in the Tax Code. I send a desk calendar to all 1040 clients.”
Johnson publishes blog posts every two weeks and conducted a webinar about the OBBBA in December to keep clients apprised.
Andrea Parness, owner of Belle Harbor, New York-based A. Parness Company CPA, also relies on regular outreach, with a weekly blog and monthly email linking those posts.
Stephen Mankowski, founder of Mankowski Associates CPA in Hatboro, Pennsylvania, keeps his website up to date, sends a monthly newsletter, and is encouraged by Facebook followers sharing his content on tax law changes.
Despite the communication efforts, which also include speaking at local business events or seminars, these tax preparers often find themselves fielding the same questions and correcting misinformation.
“We really hear from so many people, ‘How is this new tax on Social Security going to affect me? How does that work?'” shared Mankowski. “That’s not part of the bill. That’s still the same. It’s one of those ‘they know enough to be dangerous, but do they know what the changes really are?’ Fortunately, between my AICPA committees and presentations I’ve done with [the National Conference of CPA Practitioners], I’ve been able to professionally dive in and really analyze these bills.”
These are joined by the perennial questions, as relayed by Fishman: “Everyone’s biggest concern: ‘How soon can I get it done? How much money am I getting back? Why do I owe money?’ The general concerns for most people are: Are they getting money back; why aren’t they; how quickly?”
Thankfully, many preparers report clients coming to them with these questions sooner.
“What I found this year, which is very different, is people want to be heard,” said Parness. “They don’t want to get on an appointment and hear about their taxes. They want to be able to say, ‘I’m worried about this. I care about that. Last year, this was a problem. Is there anything I can do?’ So, I think that they’re looking for solutions rather than just a tax return. And even though it’s tax season, we call it tax planning season. I guess we should call it solution season.”
Capacity concerns
In addition to some clients being earlier, Fishman is also seeing more of them.
“I am getting more people finding me,” he shared. “The last few years, I’ve had a lot of growth picking up clients. People are looking for knowledgeable people who are credentialed.”
The swell of clients leads to the usual constraints, especially with the “overall tax season compression” Mankowski said he experiences every year.
“Our biggest concern is we don’t have capacity on everybody,” Parness said. “That would be a concern. We get through it every year and every year we’re worried about the same thing, and everybody tells us, ‘Oh, you worry about that every year. It’s always fine.’ But we need to be able to make sure that we are taking care of everybody really, really well. And so my concern is that there’s so many people in need and we’re not good at saying no. Getting better at it, but not so good at saying no. So my concern is that we run out of capacity. I don’t want to hire more people.”
To help with this, Parness is not taking new clients, except in a few rare cases of other client referrals. She already has her hands full with current clients, who are “much earlier” this year in sending their information.
Johnson, meanwhile, did hire this season to combat the same issue, but then found a new problem.
“This year for the first time, I went to an employment agency for a temporary person I needed,” Johnson shared. “I usually start in October on Indeed, ZipRecruiter to find employees to hep for tax season. It has in the past few years been harder and harder to find qualified preparers. It’s gotten to the point for actual tax preparers, I give them a little test when they come to my office. People that say they are tax preparers have no idea what to do. I used an employment agency this year. They sent me someone who was supposed to be a tax preparer with two to three years’ experience. They were no better than a data-entry person. I already let her go. It was taking longer to fix her mistakes, so I just do it on my own.”
Johnson ascribes the change to the wider staffing trends in accounting.
“I’ve been in business for 25 years,” she said. “People used to come to me asking for a job. Only since Covid am I now searching for employees. Fewer and fewer young people are even going into accounting.”
Fishman shared that he could use a bookkeeper on staff — “one more full-time staff person.”
Timely (so far)
Among the other changes to keep clients aware of this season is the change in mail processing, said Mankowski: “Instead of getting processed at a local post office, it goes to a regional post office for processing. Potential issues come from that due date.”
For the many clients starting their filing process on the early side, however, preparers attribute their promptness to having more questions and even expecting bigger refunds.
“People are bringing documents to us quicker this year,” Johnson said, with “some expecting bigger refunds. We also asked clients to come in earlier because of changes we had to work through, so they are quicker dropping off or uploading to the portal.”
Overall, Mankowski reports tax season so far to be “pretty comparable” to prior ones, but added, “It is more front-loaded with individual returns. The business [returns] are a little slower right now, but that should be changing up in March. March 15 will be here before we know it. It’s rolling along pretty well. The IRS is accepting returns quicker than I remember. No one is really commenting they haven’t gotten their refunds yet. They must be paying out.”
