Employers and small businesses have a new January filing deadline for W-2s, the Internal Revenue Service warned, adding that it must also hold some refunds until Feb. 15.
A new federal law accelerates the W-2 filing deadline for employers to Jan. 31. The new law also requires the IRS to hold refunds involving two key refundable tax credits until at least Feb. 15.
Last December’s PATH Act enacted the new requirement that employers file their copies of the W-2 submitted to the Social Security Administration, by Jan. 31. The new deadline also applies to certain 1099-MISCs.
Previously, employers typically had until the end of February if filing on paper or until the end of March if e-filing to submit their copies of these forms.
In addition, there are changes in requesting an extension to file the W-2: Only one 30-day extension to file a W-2 is available; this extension is not automatic. If an extension is necessary, a Form 8809 must be filed as soon as possible, but no later than Jan. 31.
The Jan. 31 deadline has long applied to employers furnishing copies of these forms to their employees; that date remains unchanged.
Due to the PATH Act change, the new law requires the IRS to hold the refund for any return claiming either the Earned Income Tax Credit or the Additional Child Tax Credit until Feb. 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.
Read Article: http://www.accountingtoday.com/news/tax-practice/employers-face-new-w-2-deadline-some-refunds-delayed-79698-1.html
Annual inflation adjustments will affect more than 50 tax provisions, including the tax rate schedules, in tax year 2017, the Internal Revenue Service announced.
Revenue Procedure 2016-55 provides details about the annual adjustments, which will generally be used on returns filed in 2018.
Some highlights of the changes:
Read Article: http://www.accountingtoday.com/news/tax-practice/some-tax-benefits-to-increase-slightly-in-2017-79654-1.html
Intuit chairman and CEO Brad Smith sees five major technology trends impacting small businesses and the advisors serving them: social media, machine learning, the power of platforms, mobile and security.
In a keynote address at the Third Annual QuickBooks Connect user conference, held here this week, Smith noted, “We are entering a period of unprecedented change – but also a time of incredible opportunity.”
1. Social. “This is not just relationships anymore -- it’s about how we make decisions,” Smith explained, noting that seventy-three percent of people consult with a social network before making a purchasing decision. “Having a strong social presence can no longer be an afterthought,” he concluded.
2. Machine learning. “Ninety percent of the world’s data was created in the last two years,” Smith said, and the technology sector is rapidly developing tools that allow computers to detect patterns within that data – and react to it to make customer experiences better. “You may be asking, ‘How will this touch me?’ Well, it already is,” he said, citing examples like Amazon’s recommendation engines, and tools that Intuit itself has embedded in QuickBooks that allow it to better classify transactions, or process loans more quickly.
3. The power of platforms. “Platforms are changing the world, facilitating indispensable interactions between people,” Smith said. “They tilt the playing field in your favor – making it easier for small businesses to reach customers around the world.” As examples, he cited the way Airbnb connects travelers and property owners, or how Etsy lets individual craftsmen sell their wares all around the world.
4. Mobile. Everyone – adults, children, men, women -- spends an average of 5 hours a day on their mobile device, Smith noted: “They are supercomputers in our pockets.” And the voice-recognition capabilities that are currently being added to mobile devices will be game-changers. “People can talk faster than they can type,” he said, with voice recognition allowing people to shop on Amazon, for instance, three times faster than before. “We are incredibly bullish on voice.”
5. Security. “There was a time when being a small business gave you a sense of security that hackers would only go after large businesses – but no longer,” Smith warned. Cyber attackers now go after weakness, not size, and that leaves small businesses vulnerable, with serious consequences, since it will cost the average small business $21,000 to recover from a breach. Intuit is taking the issue seriously, having launched over 30 new security innovations in the past year, Smith said, but he encouraged the small businesses and accountants in the audience to collaborate with software vendors to improve security – and to pursue the safe haven of online software, which offers higher levels of security. “We are safer when we’re acting together,” he said, “and we’re safer when we’re in the cloud.”
Read Article: http://www.accountingtoday.com/news/accounting-technology/intuits-smith-5-major-tech-trends-you-cant-miss-79667-1.html
The Internal Revenue Service still has some work to do to strengthen the controls over its Electronic Authentication Process after criminals gained access to an estimated 724,000 taxpayer accounts through its online Get Transcript application last year, according to a new report
The report, from the Treasury Inspector General for Tax Administration, acknowledged the IRS has taken several steps to improve its systems and provide more secure authentication, including strengthening its application and network controls. However, the IRS should take further actions to improve security over its eAuthentication process, according to TIGTA’s report.
The IRS took down the Get Transcript app in May 2015 after it discovered criminals were using the system to access transcripts of hundreds of thousands of old tax returns (see IRS Detects Massive Breach in ‘Get Transcript’ Application and IRS Finds ‘Get Transcript’ Data Breach Was More Widespread).
Last tax season, taxpayers and tax professionals could only use the online service to order tax transcripts that would be sent to them by mail, instead of being able to view and print the tax transcripts directly online. The IRS only restored the Get Transcript application this past June, adding a multi-factor authentication process to deter identity thieves (see IRS Relaunches ‘Get Transcript’ App with Better Authentication).
The IRS had similar issues with the Identity Protection PIN service that is supposed to safeguard victims of identity theft by giving them a special personal identification number to use when filing their taxes. The agency needed to suspend the use of the IP PIN service this past March after discovering it too had security vulnerabilities (see IRS Suspends IP PIN Service for Identity Theft Victims). The IRS revived the tool in July after beefing up the authentication procedures (see IRS Restores IP PIN Tool with Improved Authentication).
The IRS has also tried to improve the authentication capabilities of its online e-Services for tax professionals, warning them last month they would have to re-register using a new Secure Access process by October 24 (see E-Services Users Must Re-Register, IRS Warns). However, last week the agency sent an email to tax professionals telling them the security upgrade has been postponed indefinitely (see IRS Delays E-Services Security Upgrade).
The report released Wednesday by TIGTA blamed poor communication between the IRS and an outside contractor for the authentication problems behind the Get Transcript breach, so the IRS did not entirely know what was being screened through the Integrated Enterprise Portal. Therefore, it was unaware of the weaknesses related to detecting automated attacks or which tools it might need to address them. The IRS failed to clearly specify which parties, including specific IRS divisions and contractors, were responsible for detecting and preventing such automated attacks.
At the time of the Get Transcript breach, the IRS was not doing enough to monitor its audit log reports. In July 2014, for instance, one user tried to authenticate 902 times within a single 24-hour period, far exceeding the trigger that was supposed to signal unusual activity to the IRS. On top of that, the IRS lacked a routine way to correlate its audit log information across different repositories. Although the IRS was able to produce the required reports while it was being audited by TIGTA, the reports merely provided lists of transactions and did not include summary information that could be used to identify any trends. In addition, the eAuthentication audit logs failed to capture some useful transaction information. Plus, the IRS did not provide the staff members who were responsible for this work with the tools and training they needed to monitor and analyze large amounts of audit log data.
TIGTA recommended that the IRS’s chief information officer clarify the various IRS and contractor responsibilities for preventing automated attacks. The IRS should also monitor the results of the controls it is putting in place to prevent and detect automated attacks, TIGTA suggested. In addition, the IRS should ensure it implements a policy for monitoring audit trails and provides its security specialists with enough tools and training. The IRS also needs to improve its audit log analysis, compile periodic summary data of eAuthentication volume and any unusual activity trigger event transactions, and make sure its audit trails indicate which target application the user intended to access after authenticating, according to the report.
“The risk of unauthorized access to tax accounts will continue to grow as the IRS focuses its efforts on delivering online tools to taxpayers,” said TIGTA Inspector General J. Russell George in a statement. “In this environment, it is incumbent upon the IRS to take every possible step to ensure the security of taxpayer account information.”
The IRS agreed with TIGTA’s recommendations and said it has already completed four of the seven recommendations in the report. The IRS also plans to provide its security specialists with the proper training, produce monthly reports for unusual activity, and ensure that audit trails indicate the target application.
IRS CIO S. Gina Garza said the IRS has taken a number of steps to improve the eAuthentication program. “We have worked with the United States Digital Service to identify the most critical authentication requirements and implement appropriate methods of delivering secure account multifactor authentication,” Garza wrote in response to the report. “The IRS is also working with state tax authorities and the tax preparer industry to jointly develop additional steps to combat stolen identity refund fraud, as well as developing capabilities to quickly detect and prevent malicious activity and fraudulent transactions.”
The new initiative includes plans to deploy additional capabilities to analyze large volumes of data across the IRS and track end-to-end access and usage of online applications, according to Garza. On top of that, the IRS has put in place enhanced network controls to further prevention and the detection of automated attacks. Garza believes this improvement will reduce the risk of unauthorized access to tax records.
Read Article: http://www.accountingtoday.com/news/tax-practice/irs-authentication-process-still-prone-to-fraudsters-79603-1.html
When you are looking for a good accounting firm to handle your business accounts, it is imperative that your search is thorough and not rushed, as the success of your business will depend on it. The question that you need ask is, what do you need to check for when looking for an accounting firm that meets your needs?
The following 10 aspects will help you with your research and to arrive at your decision:
A firm that has received recognition from various authoritative organizations or publications is a good sign. Being voted a top 100 firm by a publication,such as Accounting Today, is an example of such recognition.
2. Commitment to quality
A commitment to quality from the accounting firm is definitely a requirement for your business. Any membership of the numerous accounting bodies is also a show of commitment to quality.
It is important to read client testimonials as they will give you a good insight as to how the accounting firm performs.
4. Vision and values
The firm’s vision and core values, as laid out in their mission/vision statement, should be in line with what you desire for your own business.
5. Social responsibility
A firm’s commitment to social responsibility is a good indicator of the mindset that is evident within the firm. You will be able to gauge the firm’s support of various charities and how the employees are involved from perusing the company website.
6. Peer review
A positive opinion from others in the same industry is a valuable indicator of the accounting firm’s culture and success.Receiving good reviews from organizations like the American Institute of Certified Public Accountants (AICPA) and the Public Company Accounting Oversight Board (PCAOB) also adds value to their good reputation.
7. Good Return on Investment (ROI)
It goes without saying that any business wants to see a good ROI it has made in any sphere and hiring an accounting firm is no different. Have a look at the firm’s ROI as part of your investigation.
8. Hidden value and uncovering solutions
A good accounting firm should be able to uncover the hidden value in a project that might not be immediately apparent to your business. This aspect, alone, will add immense value to your business offerings.
A business is faced with many challenges, and it is one of the roles that your chosen accounting firm should be competent in addressing.
9. Forming relationships and accessibility
As we are primarily dealing with money here and usually vast amounts of it at that, a relationship of trust, respect and good service needs to be built up between client and accountant.Accessibility is another key point as the firm’s expertise and talent needs to be available when needed by the client.
It is important to establish at the onset what the accounting firm guarantees and how it is actually guaranteed. Also in the event of dissatisfaction, how are these matters resolved to both party’s satisfaction.
Read Article: http://www.huffingtonpost.com/sam-cohen/10-aspects-that-make-a-go_b_12523434.html
I’ve talked to many budding entrepreneurs who have the energy, discipline and optimism to successfully go solo, but they don’t always have a clear roadmap for managing the legal steps involved with launching a business like an accounting firm.
In my last article, we discussed how to determine if you’re ready to take the entrepreneurial plunge and start your own accounting firm (see Are You Ready to Start Your Own Accounting Firm?). If you have decided that you’re truly ready to go solo, here’s an overview of seven important legal steps to launch a new accounting business:
1. Choose Your Business Name
One of the first questions is deciding if you should market your business using your own name or create a business name. Many solo accountants use their own name since it makes your company transparent and personal. On the other hand, a business name (even if it’s just a variation of your personal name) can make you seem well-established and experienced.
If you decide to create a business name for your new business, you need to make sure it is available to use. Do this as early in the process as possible, since you don’t want to invest time and money in a name that you’ll ultimately be forced to change.
First, check to make sure there’s an available domain name; you can use a site like GoDaddy.com to instantly find out if there’s a suitable domain (they’ll give you suggestions in case your proposed name is already taken). Then, check if the name is available in the state where you’re planning on operating the business. You can contact your state’s secretary of state office, or many online legal filing service sites will perform this basic name search for free.
If no one in your state is using the name, the next thing you’ll want to do is search the U.S. Patent and Trademark Office to find out if anyone has an approved or pending trademark for your name. This step is crucial, since you don’t want to receive a nasty letter from an attorney that you are infringing on another company’s trademark. The search also will let you know if you’ll be able to trademark your business name, in case you plan on doing business in other states and want federal trademark protection.
2. Register Your New Business
The next step is to choose your business structure and register your new business with the state. Solo accountants and small accounting firms typically choose among the LLC (Limited Liability Company), PLLC (Professional Limited Liability Company) and PC (Professional Corporation). Since these business entities are state constructs, rules vary between states. For example, in some states, like New York, professionals cannot form an LLC, but may form a PLLC instead. You can read Should You Structure Your Accounting Firm as an LLC, PLLC or PC? for more details. And, you can always call the Secretary of State’s office in your state or an online legal filing service to find out the specific rules for accountants in your state.
3. Get Any Necessary Licenses and Permits
All states require some form of licensing for accounting firms that provide public accounting services. For example, you (or the owner of the firm) must hold a CPA license and the firm may need a public accountancy license as well. Check with your State Board of Accountancy to determine the state requirements to register your firm.
And while accreditation as a CPA is the basic minimum for starting a CPA firm, you may also need to apply for other state and local municipality permits. These licenses can include a general business operation license, a home occupation permit (if you’re running your business from home), or signage permit. To find out what you need, check with your local government office or online legal filing service.
4. Get a Tax ID Number
A Tax ID number, also called a Federal EIN (Employer Identification Number), lets the IRS track your firm’s transactions. It’s like a social security number for businesses. This ID number is mandatory for LLCs and corporations; in addition, you will typically need a Tax ID number before you open a business bank account.
5. Open a Business Bank Account
Once you have registered your business with the state and have your Tax ID number, you can open a business bank account. This allows you to accept checks and other payments made out to your business name. And, a business bank account will keep your personal and business finances separate—which is mandatory for LLCs and corporations.
6. Get Insured
While LLCs and corporations do help lower the personal liability of the business owner, they do not shield owners from personal liability related to their own actions. For example, a professional corporation or LLC will protect you from personal liability related to business debt and malpractice suits directed at other associates, but it won’t protect against malpractice suits aimed at you.
For this reason, many accounting and other financial professionals take out a good insurance policy, which can include Business Owner’s Policy (BOP), Professional Liability Insurance, even Data Breach Coverage. Talk to an insurance agent who specializes in or is familiar with the insurance needs of accountants and financial service businesses.
7. Understand Your Business Compliance Requirements
Running an LLC or corporation is more involved than operating a sole proprietorship. For example, as an LLC (or PLLC), you’ll probably need to file an Annual Report with your state each year, along with showing proof of a valid certification. Corporations have more corporate compliance requirements, including annual reports, annual meetings and meeting minutes.
When you form an LLC, PLLC, corporation or professional corporation, be sure to ask about the specific annual requirements for your state. Some online filing services offer a free service to help you track your compliance needs so you don’t risk falling into bad standing because you forgot to file a form.
The bottom line? Launching an accounting business isn’t complicated, but you do need to set it up properly. Following these steps will help give your business a solid legal foundation to protect you and help you grow for years to come.
Read Article: http://www.accountingtoday.com/news/firm-profession/seven-legal-steps-to-start-your-own-firm-79598-1.html
Hurricane Matthew victims in much of North Carolina and parts of South Carolina, Georgia and Florida have until March 15 to file certain individual and business tax returns and make certain tax payments, the IRS said.
This includes an additional filing extension for those with valid extensions that run out at midnight tonight, Oct. 17.
The IRS is now offering this expanded relief to any area designated by FEMA as qualifying for either individual assistance or public assistance. Taxpayers in counties added later to the disaster area will automatically receive the same filing and payment relief.
Currently, the following areas are eligible for relief:
The IRS said this step is due to the unusual factors involving Hurricane Matthew and the interaction with the Oct. 17 extension deadline.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4. Affected individuals and businesses will have until
March 15 to file returns and pay any taxes originally due during this period. This includes the Jan. 17 deadline for making quarterly estimated tax payments.
For individual filers, it also includes 2015 income tax returns that received a tax-filing extension until Oct. 17. The IRS noted, however, that because tax payments related to these 2015 returns were originally due on April 18, those are not eligible for this relief.
A variety of business tax deadlines are also affected, including the Oct. 31 and Jan. 31 deadlines for quarterly payroll and excise tax returns. It also includes the special March 1 deadline that applies to farmers and fishermen who choose to forgo making quarterly estimated tax payments.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after Oct. 4 and before Oct. 19 if the deposits are made by Oct. 19. Details on available relief can be found on the disaster relief page on IRS.gov.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at (866) 562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Read Article: www.accountingtoday.com/news/tax-practice/tax-relief-broadened-for-matthew-victims-79576-1.html
Taxpayers can’t fill their own teeth or cut their own hair, yet in recent years at least some 30 million Americans filed their tax returns from home computers, an increasing trend.
Earlier this year a GoBankingRates survey revealed that 43 percent of Americans now file taxes “from the comfort of their home.”
“A ‘digital tax-prep tool’ is the most popular option among tax filers, with more than a third … of survey respondents saying this is the method they use,” surveyors reported. “Tax-filing software is a popular option most likely due to the lower costs associated with filing digitally, as well as the ease of using a program to automate calculations and file online.” Only 28.5 percent of respondents said an accountant files their taxes.
“There’s been a DIY trend in many industries because people are trying to conserve money,” admitted Enrolled Agent Jennifer Brown at Implex Tax & Accounting in Clearfield, Utah.
That supposed “ease of use” seems to motivate many self-filers. “Many people who self-file believe they can buy software and it will automatically prepare a correct return,” says G. Faith Owens, an EA at Grade A Business Services in Glendale, Ariz. “And it will if that person has a clear understanding of their own source documents, accounting and the question presented on the screen.”
“Have you ever sat down and seen how long it takes people to use software such as TurboTax?” said Michael Deininger of Deininger & Co. in Kenosha, Wis. “A return that I could have input, printed and e-filed in five minutes [can take] 90 minutes to complete on TurboTax, and then you can’t see the completed return until you e-file. I don’t see self-filing cutting into my business, but I charge a minimum of $250 a return so I can devote myself to my existing clients.”
‘Not even close’
“The main reason I am concerned about the increase in self-filing is that they are wrong wrong wrong!” said Terri Ryman, an EA at Southwest Tax & Accounting in Elkhart, Kansas. “I can’t imagine how much money the IRS is unable to collect because of the antics of self-filers. They post on the wrong forms and lines, don’t pay SE tax when required [and] take ridiculous deductions that are not even close to tax law.”
“I’m concerned for those who self-file in that the code is getting so complex that they’ll find themselves in situations of hearing from the IRS,” said Twila Midwood, an EA at Advanced Tax Centre, in Rockledge, Fla. “I am not concerned that it will cut into my practice. We may prepare fewer returns but may [also] find ourselves helping more taxpayers who’ve received correspondence from the IRS.”
Representation work is proving just one of the unintentional benefits for preparers from self-filing. “Although I’ve had folks do their own returns in the last five to 10 years,” Ryman said, “inevitably they end up coming to me with the mandatory IRS letter, not understanding what they did wrong. And once burned, they usually end up using our services from then on.”
EA John Dundon, of Taxpayer Advocacy Services in Englewood, Colorado, applauds and encourages DIY filers. “More people doing their own income tax preparation,” he said, “means more audit and appeal representation work in the future for me.”
Ryman noted that such added services as representation have reduced prep to only about 40 percent of her practice.
Show them the value
Brown sees a few varieties of DIY filers –- and noted some ways to turn them into paying clients.
“The ‘changers’ come in whenever they have a change, see how we handle it and then go back to self-preparing,” Brown said. “If we build a good relationship with these clients, at some point they’ll stop doing it themselves or they’ll refer others that don’t want to do [taxes] themselves.
“‘Fixers’ are the ones that have us fix what they’ve messed up,” Brown added. “They usually become great clients after their first IRS scare. The ‘not a chancers’ would never consider doing it themselves.”
Brown’s point? “There are a lot of different types of clients out there. If we show them value in what we do and educate them on why they need us, we will always have enough clients.”
Added Owens, “I spend more time now educating my clients about their own errors after the fact then preventing the errors up front. Often, untangling those errors will require more work than to have prepared the return correctly in the beginning, so those self-filers are actually adding to my billable hours and bottom line.”
Read Entire Article: http://www.accountingtoday.com/news/tax-practice/self-filing-or-self-defeating-79563-1.html
How do you gain the trust of your current and prospective clients, as well as colleagues, subordinates and others with whom you do business or want to do business?
One of the best ways to build trust is to always deliver on your promises and commitments. When you commit to follow up on an issue, take ownership and do just that. A common mistake and “trust-buster” is failing to regularly communicate your status and not keeping the involved parties adequately informed. You know how frustrating it is when you are waiting for information that is vital to your business, so avoid becoming the cause of frustration for your clients, prospects or colleagues by applying great follow-up skills.
Another way to build trust is to establish ongoing relationships by keeping your clients and prospects top of mind all the time and demonstrating that you are thinking about them and their business concerns. For example, if you read a newspaper story, online article or blog that may be of interest to a client, prospect or coworker, forward the link or copy and send the article. Include a short personal note about how the information may interest or affect them, whether positively or negatively. Your short note or interpretation is a value add, which is particularly effective in demonstrating that you are keeping them in mind. An enhanced opportunity to demonstrate your sincere interest exists when you encounter an article or some information that enables you to leverage a third party’s perspective to support an idea, product or service you may have already under discussion with them.
By maintaining regular contact, clients and prospects learn to trust your motives and intentions and will be more receptive to considering your advice or proposal. To establish a trust-based relationship with a prospect, do your homework and learn as much as you can about their business and about the person with whom you plan to meet. When meeting for the first time, do not begin the meeting by selling your firm’s services, but instead take the time to learn about the prospect’s business, and look for ways to help them.
Skillful and tactful questioning will get your prospects and clients to open up and share information and insights to help you understand their needs. Ask well formulated, open-ended questions to open up a dialogue that allows you to learn about their business and the challenges they are facing.
Another great way to begin building trust is to stop and listen to the answers to your questions. Use the popular 80/20 rule and create a dialog where you are listening to the client 80 percent of the time and speaking only 20 percent. You may find this approach difficult initially, but with practice you will uncover important information, learn more about their needs, and signal to the client that you value and place great importance on what they have to say.
When building trust, it is essential to provide flexibility and room for collaboration. Provide possible scenarios and options when offering ideas and advice to clients and prospects to actively engage them in the process. Clients who are actively engaged often allow a deeper level of interaction and provide more perspective into preferred or alternative outcomes. By offering alternatives and providing options, you empower the client to think about how each offering impacts their business. Take the time to thoroughly review and discuss each option from top to bottom. Full disclosure will help formulate a positive impression about you and your firm.
Include and highlight both advantages and disadvantages, demonstrating that you, as their advocate, want them to see all sides before making a decision. Knowing the client’s desired outcome enables you to make better decisions and develop a proper plan to achieve success.
To be considered in good faith your ideas must be perceived by clients to have their best interest in mind. Providing options that are not in the client’s absolute best interest are usually quickly discovered, if not by the client, then most certainly by your competitors. If the client perceives, or worse, determines that you have placed your own interests before theirs, the trust you have worked so hard to build will quickly be lost. The best client solution may not always yield the most profit or best scenario for you and your firm, but helping a client with the best solution for them opens the door to future opportunities.
Our firm recently delivered an on-site business development program for a large firm that focused on the value of building trust-based relationships.
We highlighted results from a survey conducted by Miller Heiman that singled out lack of trust as the No. 1 reason prospects do not buy from a certain provider. In fact, lack of trust was cited by over 50 percent of respondents as the single most important reason buyers turned down a service provider.
In contrast, and by a vast margin, the second reason given for not selecting a firm, no need for the services, accounted for only 13 percent of the responses. Extrapolating from these two responses we learn that even if a client or potential client has a need, they will not engage you if they do not trust you.
A few years ago, our firm was engaged with a client on a critical business project. After considering several project approaches, we decided to provide two options but strongly recommended one over the other. The project we recommended was the least expensive option for the client. The client accepted our recommendation, engaged our firm, and we delivered as promised. Our client was appreciative of the selfless nature of our recommendation. Later, when another opportunity arose, the client again engaged our firm.
It was our strong recommendation, made without regard to our own self-interests, which cemented the client’s trust in our firm. This well-placed trust was the foundation for our client referring our firm to others. As our relationship has grown, we have continued to receive additional project engagements, often without the requirement for a competitive bidding process.
Despite every effort, even the best CPA may not always be able to obtain the exact outcome their client had anticipated. Should this situation arise, a meeting or call needs to be made to the client without delay to deliver the news and discuss alternatives. Your status as a trusted advisor is invaluable in these situations and will enable you to work through the difficulties as partners and not adversaries.
Less than ideal news is better received when delivered from a trusted source. Your role and status as a trusted advisor often facilitates a more rapid transition to discussing alternatives. While the current outcome may not have been the desired result, CPAs who cultivate strong and trusted client relationships are in a much better position to retain the client’s business than those without a similar relationship.
During difficult economic times, CPAs who have built trust-based client relationships may reap other financial benefits, such as easier contract negotiations and potentially having their statements paid in a more timely fashion.
The single most important reason why prospects do not engage is lack of trust. Building trust is an investment whose ROI is often slow to materialize and hard to quantify. By putting your client’s needs first and always remembering “the relationship value is greater than the engagement value,” you will build trust more quickly and help secure clients for the long term. As your client’s trust builds, your reputation will grow, your referrals will increase, and your practice will expand, allowing your firm to flourish.
Read Entire Article: http://www.accountingtoday.com/news/firm-profession/building-client-trust-in-your-accounting-practice-79544-1.html
In the wake of Hurricane Matthew, the Internal Revenue Service has released new rules and procedures for deducting disaster losses.
Revenue Procedure 2016-53 contains rules and procedures for the election under Section 165(i) of the Tax Code to deduct a disaster loss for the taxable year immediately preceding the taxable year in which the disaster occurred. The revenue procedure provides the procedures and requirements for making and revoking an election under Section 165(i).
Along with the revenue procedure, the Treasury Department and the IRS issued temporary regulations to extend the date by which a taxpayer must make a Section 165(i) election to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file).
The temporary regulations also extend the time for revoking a Section 165(i) election to 90 days after the due date for making the election.
A taxpayer makes a Section 165(i) election by deducting the disaster loss on either an original federal tax return or an amended return for the prior year. Taxpayers need to include an election statement indicating they are making a 165(i) election. The election statement has to contain the name or a description of the disaster and date or dates of the disaster which gave rise to the loss, along with the address, including the city, town, county, parish, state, and zip code, where the damaged or destroyed property was located at the time of the disaster.
For an election made on an original federal tax return, a taxpayer must provide the information on Lines 1 or 19 (whichever is applicable) of Form 4684 (Casualties and Thefts). A taxpayer who files an original federal tax return electronically can attach a statement as a PDF document if there isn’t enough space on Lines 1 or 19 of Form 4684.
For an election made on an amended return, a taxpayer can provide the required information by any reasonable means, such as writing the name or a description of the disaster, the state in which the damaged or destroyed property was located at the time of the disaster, and “Section 165(i) Election” on the top of the Form 4684 and providing the rest of the required information in either the Explanation of Changes in Form 1040X (Amended U.S. Individual Income Tax Return), Form 1120X (Amended U.S. Corporation Income Tax Return), or another appropriate form, or directly on the Form 4684, attaching a statement if there isn’t enough room on the form.
On Tuesday, the IRS said it is offering extensions of time to file and make tax payments to victims of Hurricane Matthew in North Carolina (see IRS Offers Tax Relief for Hurricane Matthew Victims). Additional tax relief is expected to be announced for taxpayers in other states damaged by the hurricane.
The IRS said Thursday that taxpayers who have been affected by Hurricane Matthew but are not yet covered by a federal disaster declaration with individual assistance may still qualify for relief from penalties if they aren’t able to meet Monday’s extended deadline for filing 2015 tax returns.
More individual assistance areas could be added to the federal disaster area in coming days based on continuing damage assessments by the Federal Emergency Management Agency, the IRS pointed out. These additional disaster declarations will pave the way for more extensions and other relief from the IRS. The IRS will automatically provide retroactive extensions and other relief to any locality added to the federal disaster area at a later date. In areas with disaster declarations for individual assistance, taxpayers will have until March 15, 2017 to file returns otherwise due on Monday, October 17.
“The hurricane and flooding have hit many different states hard, and the timing of this is especially tough for taxpayers and tax professionals planning to file by the Oct. 17 extension deadline,” said IRS Commissioner John Koskinen in a statement. “We have been watching this situation unfold and remain in close touch with FEMA. We will do everything we can to work with taxpayers who are in affected areas.”
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