3 Tips to Tackle the 2020 Tax Season03/30/2021
Stimulus payments, unemployment benefits, and PPP loans are just a few factors that could make filing 2020 taxes a lot more complex for the average taxpayer. For companies with employees working from home and newly reworked budgets, finance and accounting departments also have the added burden of readjusted payroll, altered spending and invoicing practices, and new compliance hurdles. This all adds up to a lot more support needed to get it done. But it can get done with new processes, technology, and strategy, which are all vital to help you navigate the uncharted waters of the 2020 tax season.
So how can you be equipped to handle the new tax changes with ease? Here are three considerations you need to know:
Understand the Changes
Starting in 2018, tax reform changed nearly every aspect of the U.S. income tax code, and every business and individual was affected and had to adjust to new rates and rules. However, 2021 is a new beast altogether. The tax legislation enacted in response to the COVID-19 pandemic will make its first appearance on 2020 tax returns, and businesses need to lean heavily on accounting departments to make it through. They not only need to know the ins and outs of tax changes from the Tax Cuts and Jobs Act and the CARES Act, but also be able to adapt to last-minute changes to instructions, forms, and processing software in response to the Consolidated Appropriations Act 2021. All in all, it’s a big lift for any accounting department. Addison Group has worked closely with clients to find them tax professionals who have the expertise needed to navigate the latest tax updates partner with their accounting teams to get through the process with ease and efficiency. Having someone on your team who lives and breathes tax codes and compliance is a must for any organization.
Adopt New Technology Now
For many organizations pre-pandemic, updating tax systems wasn’t at the top of the list. When teams worked in person, documents were easily exchanged and processed without the reliance on technology. But 2020 changed the game in a big way. Many companies either had to learn new technologies on the fly or insist their teams go to the office to pick up tax forms and coordinate information.
To be successful in an agile environment, organizations must implement technologies to modernize their processes. To get started, consider which tax processes can be automated. Many in the finance industry are looking to Artificial Intelligence (AI), Machine Learning (ML), and Robotic Process Automation (RPA) to streamline processes for compliance and tax code changes, improving efficiency and provide critical business insight.
Addison Group has worked with clients before and during COVID-19 and understands the unique challenges and needs of adopting the newest technologies to stay agile. We get our clients through tax season with ease by ensuring our candidates have expertise in the latest tools to help processes run smoothly, no matter where they are.
Adjust for Long-Term Remote Work
Overnight, employers had to switch from in-office to remote operations. While the migration went better than most expected, remote work is here to stay. Employers expect 19% of their workforce to continue working from home full-time post-COVID. That’s roughly half the percentage working from home in July 2020 (44%), but almost three times 2019’s figure (7%). When it comes to tax considerations, the changes will stick around as well.
Now that employees work from home, the state they reside in affects employers’ tax considerations greatly. Some states even have more rigid rules that could require tax calculations based on the number of days an employee works within a state. Accounting and tax teams must work directly with leadership to gain knowledge on where employees work, and when to understand potential tax liabilities.
Accounting and finance teams have a lot to juggle in their day-to-day work and tackling tax season is no easy feat. We work alongside our clients, assessing new regulations and implementing the latest technology to ease the burden no matter the challenge. Partner with us today to get your organization moving in the right direction.