The 2020 tax season is proving to be perhaps the most complicated and one of the most daunting in history. A global pandemic, new tax legislation, remote work and a host of other factors have combined to form a monsoon of stress for accountants and tax preparers.

Navigating the storm of practical and legal concerns brought on by this year’s busy season won’t be easy. But, there are steps you can take to manage your stress, overcome the complexities of working remotely and still deliver great results for your clients.

Let’s take a look at four ways accountants and tax preparers can go beyond surviving this year’s busy season and thrive in this challenging time.

1. Manage time + stress

Time and stress management are always critical to busy season success. In a busy season that’s anything but ordinary, those skills are more vital than ever. Here are a handful of tips to get your stress and time management under control at a time it’s needed most.

• Make sure clients understand their responsibilities. You can’t deliver on expectations when clients don’t hold up their end. Gently explain to your clients that there will be consequences if they don’t meet deadlines for providing you with necessary information. Set clear rules, get the client to agree to them and document everything for later reference.
• Give in a little to distractions. If you’ve been working from home for a while, you likely already have a routine that helps you avoid distractions and stay focused for most of the day. Allow yourself regular, frequent break time, which will likely increase your productivity in the long run.
• Use your phone’s “do not disturb” feature. Constant connectivity has a dark side. It’s almost impossible to concentrate when your phone buzzes every 30 seconds with a new email or text. But how often do any of those things require your immediate attention? Try turning your phone to “do not disturb” and setting your alarm for one hour. When the alarm goes off, that’s your cue to check for and respond to messages. You’ll be shocked how much you can get done without your pocket constantly vibrating.
• Get a “break accountability” buddy. When you’re in the zone, forcing yourself to take a break can be difficult. And we probably don’t have to tell you that, when working from home, it’s challenging to shift yourself out of work mode to perform daily tasks like taking a shower or eating lunch—let alone find time for proven stress relievers like exercise or meditation. Find a friend, preferably another accountant, and agree to hold each other accountable for taking a certain number of breaks each day and sticking to your routine.

2. Ensure security, privacy and client peace-of-mind

Security and privacy are always top of mind for tax clients, and the move toward remote work has only increased their importance. With accountants preparing taxes on their own hardware and using their home internet connection, the risks of a security breach are pervasive—and regulations have tightened in response.

The Federal Trade Commission (FTC) requires all professional tax preparers to maintain a written plan for addressing the security and privacy of client information. Depending on your situation, you may either need to create this plan for the first time or update it to include language on how you’ll protect client data while working remotely. As part of your security plan, the FTC requires you to meet a number of different protocols, from setting up an information security program to regularly testing these safeguard programs. If you need some help, this guide from the IRS provides plenty of information and advice, as well as guidance for complying with the FTC Safeguards Rule.

Another way you can help protect your clients’ information is by using a virtual private network (VPN). VPNs mask information about your computer and physical location while you’re online, helping to shield you from a number of online threats, including identity theft. Some VPNs come packaged with security protocols, enabling you to offer (and advertise) further protection to your clients. 

3. Collaborate virtually for better tax preparation

Working from home is a lot easier and more efficient when you can connect with people anywhere and anytime. If you haven’t already, get your clients and teammates onboarded onto an all-in-one video chat and messaging solution like Slack. Make sure you have rules in place about when people should be available to talk, how quickly you expect a response and when video conferences can be scheduled.

You can also make your life a lot easier by using project management software to track projects and timelines, manage files, and keep yourself, your teammates and your clients on task. Professional solutions like Asana can help you keep up with practically every aspect of work—but even less expensive services like Trello are better than going at it on your own. 

4. Get familiar with new tax regulations and legislation

Many of your clients are likely taking advantage of new 2020 government assistance, such as the CARES Act, and are looking to you for advice on how this impacts their returns. In particular, you’ll want to study up on Paycheck Protection Program loans (PPP) and the standards used as guidance for accounting for them. Some of the major provisions include:

• ASC 405-20 - Extinguishments of Liabilities
• ASC 470-50 - Debt Modifications and Extinguishments
• ASC 958-605 - Not-for-Profit Entities, Revenue Recognition
• IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance

You’ll also want to look into the complex issue of deductibility of expenses used for PPP loan forgiveness.

Other changes for this year’s tax season include:

• Changes to Net Operating Losses (“NOLs”) under the CARES Act: Taxpayers with NOLs in tax years beginning 2018, 2019 and 2020 can carry them back five years. Maximizing the use of NOLs can be a significant tax strategy and one that should be utilized in hard times.
• Net interest deduction limitation: Taxpayers limited to a business interest expense deduction of 30% of earnings before interest, tax depreciation and amortization (EBITDA) are permitted to expand this to 50% for 2019 and 2020 under the CARES Act.
• Business interest expense election: Real property or farming trades can withdraw their decision to elect out of Sec. 163(j)’s business interest expense limitation for a 2018, 2019 or 2020 tax year. The CARES Act also eased the limitation or interest expense to increase the adjusted taxable income percentage from 30% to 50%. Taxpayers can also elect to use 2019 income in place of 2020 for the computation.

Your clients will also likely have questions about the Biden administration’s proposed tax plan and its potential implications for the 2021 tax season. Speaking broadly, these provisions can be broken into three categories:

1. Raising taxes on high-income households
2. Imposing higher taxes on corporations
3. Offering expanded tax breaks to low-income households, certain companies and green energy initiatives

This quick summary of the impact of those provisions on individuals and businesses will help you answer your clients’ questions and provide them guidance as they look ahead to next year’s tax season.

Make this year’s busy season count

Let’s not forget: with all its challenges, busy season is the most lucrative time of year for most accountants and tax preparers. Complexity and uncertainty make your job more difficult, but they also make your services more vital and valuable. If the 2021 busy season is a storm, then you’re an umbrella salesman. So do your best to shrug off the stress and stay on top of the changes.

Looking for more help conquering this busy season? Explore Becker’s CPE tax courses to be in-the-know of all things tax.

Like this article? Learn about more hot accounting topics at Becker’s 2021 Virtual Accounting & Auditing Conference! Register for the conference now.

References

1. https://www.ftc.gov/tips-advice/business-center/guidance/financial-institutions-customer-information-complying