Category: Tax Planning

The Time to Embrace AI in Your Tax Practice Is Now—Here’s Why

For licensed tax professionals, artificial intelligence has moved from theoretical threat to practical reality. It’s automating workflows, transforming client expectations, and fundamentally disrupting the foundational services that have sustained many practices for decades. The question facing practitioners today isn’t whether to adopt AI—it’s whether you’ll integrate it strategically now or be forced to react desperately later.

The stakes have never been higher, and the window for proactive adaptation is closing. Here’s why waiting is no longer an option.

The Disruption Is Already Underway

While many tax professionals debate whether to adopt AI, well-funded technology companies are already deploying it to attack the most profitable segments of the traditional practice model. Tax preparation, bookkeeping, and payroll services—the bread-and-butter offerings that generate consistent revenue for most firms—are being rapidly transformed by AI-powered platforms that promise faster turnaround, lower prices, and 24/7 availability.

Consumer tax preparation software now incorporates sophisticated AI that can interview users, identify deductions, and prepare returns with minimal human intervention. Small businesses that once needed a bookkeeper can now use AI-driven accounting platforms that automatically categorize transactions, reconcile accounts, and generate financial statements. Payroll services have become increasingly automated, with AI handling calculations, compliance updates, and even employee inquiries through chatbots.

These aren’t incremental improvements—they represent fundamental disruptions to traditional service delivery models. A solo practitioner spending four hours on a straightforward corporate return is competing against AI platforms that complete similar work in minutes. A firm charging premium rates for monthly bookkeeping faces AI tools that cost a fraction of the price and work continuously without breaks.

The competitive threat is real and immediate. Clients comparing options increasingly ask why they should pay traditional professional fees when AI-powered alternatives promise equivalent accuracy at significantly lower costs and faster speeds. For routine compliance work, they have a point.

The Strategic Response: Beat Them at Their Own Game

If AI is disrupting tax preparation, bookkeeping, and payroll services, the answer isn’t to ignore it or hope clients remain loyal despite better alternatives. The answer is to deploy the same technology in your own practice, achieving the speed and efficiency advantages that make you competitive while preserving your profit margins.

Incorporating AI into your workflow allows you to match or exceed the efficiency of technology-first competitors while maintaining the professional judgment and relationship advantages that pure software cannot replicate. When you can prepare returns faster, handle bookkeeping with greater accuracy, and process payroll more efficiently, you … Continue reading

Highlights of the Latest COVID-19 Economic Stimulus Bill

On December 27, 2020, the President signed into law the House Amendments to the Senate Amendments to bill HR 133. The original HR 133 was a US-Mexico trade pact, but after months of political tinkering, amendments in both chambers, and having numerous other bills stuffed into it, became a 5,593 page monster of a bill. Tucked within it are the complete federal spending appropriations for Fiscal Year 2021, the latest COVID-19 economic stimulus effort, and numerous additional items.

Here are some of the highlights from this massive piece of legislation:

  • Federal unemployment benefits will be extended, with an extra $300 per week bonus benefit added on.
  • Individuals may be eligible for a direct payment of up to $600 per person, subject to income limitations.
  • A second round of PPP loans have been authorized for businesses that experienced a 25% or greater decline in any quarter of 2020 over the same quarter in 2019.
  • PPP loans under $150,000 will effectively be given rubber-stamp forgiveness via a 1-page application and self-certification of forgiveness eligibility.
  • Recipients of EIDL grants no longer need to subtract the grant amount from their PPP forgiveness amount.
  • Business expenses paid with PPP funds and EIDL grants are fully tax deductible, and forgiven PPP loans amounts and EIDL grants are not included as income.

There are many additional provisions in this lengthy bill, of course, but these highlights should give hope to many struggling individuals and small businesses. To learn more about the provisions of this bill that can help your family or business, search our directory of tax firms to find a tax professional near you for assistance.… Continue reading

Six Financial Best Practices for Year-End 2020

By any measure, 2020 has been an interesting year. Tens of millions of Americans have faced unemployment, and millions of small businesses have had to scale back operations, or even worse, close permanently. And right when things start to feel like they’ll return to normal, something else happens.

Thankfully, with multiple COVID-19 vaccines in the works, there’s hope the load will lighten in the new year, which is fast approaching. While we prepare for a fresh start, here are six financial best practices for year-end 2020 and beyond, none of which require any heavy lifting.

  1. Give as you’re able, get a little back. What the 2017 Tax Cuts and Jobs Act (TCJA) took from charitable giving, this year’s CARES Act partially gave back – at least for 2020.
  • A $300 “Gift”: Under the TCJA, it became much harder to realize itemized tax deductions beyond what the increased standard deductions already allow. But this year, the CARES Act lets you donate up to $300 to a qualified charity, and deduct it “above the line.” In other words, even if you’re taking a standard deduction, you can give a little extra, and receive an extra tax break back, without having to itemize your deductions.
  • Giving Large: If you are itemizing deductions, the CARES Act also temporarily suspends the usual “60% of your AGI” limit on qualified cash contributions. The exception does NOT apply to Donor Advised Fund contributions, and has a few other restrictions. But if you’ve already been thinking about making a large donation to a favorite charity, 2020 might be an especially good year to do so – for all concerned.
  1. Revisit life’s risks. As the pandemic reminded us, life is full of surprises. That’s why it’s imperative to build wealth, and protect it against the inevitable unexpected. Is your current coverage still well-aligned with your potentially altered lifestyle? Perhaps you’re driving less, with lower coverage requirements. Or new health or career risks now warrant stronger disability insurance. Might it be time to consider long-term care or umbrella coverage? Bottom line, there’s no time like the present to prepare for your future greatest risks. 
  1. Leverage lower tax rates. While it’s never a sure bet, Federal income tax rates seem more likely to rise than fall over the next little while. Even before this year’s massive relief spending, the TCJA’s reduced individual income tax rates were set to expire after 2025, reverting to their prior, higher
… Continue reading