Update: The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15th, 2021, to May 17th, 2021. (Source: IRS)
Even in the most normal of times, filing taxes – as an individual or as a CPA firm – is a demanding task. Add to that the onslaught of the ongoing pandemic and you’re looking at a potentially nightmarish situation, even for the professional CPA firms. The COVID-19 pandemic in the US has greatly affected the economy, with millions losing jobs and many others taking pay cuts. While the situation has improved over time, there still is a long way to go before businesses can genuinely call themselves “back on their feet.”
Government stimulus packages and tax cuts did give relief to the individuals and businesses alike, but the programs present new challenges to the taxation and accounting professionals. Considering the particular complexities filing taxes this year, accounting firms might be looking at an avalanche of tax preparation requests from individual and business clients who may have previously filed on their own.
This presents an opportunity for CPAs and tax preparers, but the sheer volume of requests may prove too high for most firms. To assist in this new landscape, we’re redefining tax preparation outsourcing for CPAs and accounting firms.
If you’re skeptical of working with an outsourcing partner, we’ll debunk a few commonly held myths while highlighting how technological advancements have made tax preparation safer & faster.
It’s Fast & Secure
The US tax filing season has officially begun, which means accounting firms are already gearing up to meet the need of proper tax return preparations, processing, and filings. The adept tax preparation & outsourcing services are ideal for this crunch time, ensuring a scalable & secure model to tackle it all. Many strategic CPAs and accounting firms leverage these services to help them meet the increased needs of their clients. To put it into perspective, according to a recent report, US businesses outsourced almost 39% of their finance functions, intending to push that number up to 89%.
Strict compliance guidelines to secure client information and data usage are followed to ensure that outsource firms abide by US taxation laws. The use of advanced taxation software makes providers highly efficient in filing high volumes of tax returns without compromising safety or timelines. The result is an agile readiness for peak tax season. As the season churns on and deadlines loom, it’s never too late to turn to an outsourcing partner to complete your workflow at a click of a button.
It’s an AI Driven Tax World
US payroll tax revenue is estimated to be around $1.31 trillion in 2020. The additional hours required to properly analyze and report your clients’ returns this year may over work your current staff and potentially force you to hire seasonal help. Tax preparation and outsourcing partners are increasingly using Artificial Intelligence driven tax computing software, leveraging advanced algorithms to keep up with the surge in demand.
The rise of AI in tax preparation and filing ensures absolute safety of user data while delivering precise computation of tax returns. These tax computational firms are automated, monitored, and equipped with expert tax and accounting professionals who adhere to the compliance and policies to complement the firm’s technological prowess. AI can also perform or replicate many unstructured tasks. It allows for speeds and increased precision progressing quickly through the tax lifecycle from compliance reporting to planning and filing. With world economists arguing in favor of using AI for forming Tax policies, it’s fair to say that technology in tax preparation will remain at the forefront, at greater levels than your clients may realize.
Is outsourcing for me?
The misconception that “outsourcing” is only for larger corporations has been commonplace in the industry for decades. As the new standard of working from home has proven, we live in a truly global era of electronic communications and advanced information technology. For smaller to mid-size US accounting firms, outsourcing tax preparation may prove even more beneficial than it is to their bigger counterparts. Here’s how –
- 24×7 Service – Outsourcing is game changing for US-based CPA firms. Thanks to the time zone differences, they can get their work done overnight. Since it’s not possible for local firms to operate 24×7 due to increased costs, outsourcing tax preparation partners offer the flexibility to keep their services running constantly.
- Technical Acumen – Working with advanced tax preparation software requires a specific expertise, which smaller CPA firms might not necessarily have on staff. Acquiring additional technology can cause an increase in budgets at a time when maintaining costs is paramount. With outsourced tax preparation, firms can rely on an outsourcing partner for the technology needed to effectively deliver completed returns.
- One-Stop-Shop for All Things Tax – US tax filings range in complexity from Individual (1040, 1040A, 1040EZ, 1040NR) to Corporate (1120, 1120S), Fiduciary (1041) and additional business tax compliance. Having the expertise and bandwidth amongst your staff may be a challenge, but with a trusted tax preparation partner, you can be confident that your work will be completed on time in complete conformity with IRS tax codes and regulations.
Nothing is certain except death & taxes –
We’ve all heard that saying. For CPAs this certainty is part of their core business. While many firms seek to become more strategic partners to their individual and business clients, the compliance work of tax preparation must be accomplished quickly yet properly. CPA accounting outsourcing firms are your best allies when facing the glaring tax filing deadline on
April 15th, 2021 May 17th, 2021. While they’re busy at work on your clients’ returns, you can focus on the more lucrative consultative areas of your business.
For the USA CPA & accounting firms, there’s still plenty of time to share their pandemic laden workload to a trusted partner overseas and to catch a breath during what seems like a never-ending financial year.