Lessons Learned: Preparing for Tax Season ‘13– August 07, 2012 by Tracy Monroe

Posted by Tracy Monroe, CPA, MT

We take much of what we learned from last tax season with us as we prepare for the season ahead. I thought I would share a few of the most common themes that stood out for me and will continue to inform our discussions with you during the late months of 2012 and into early 2013.

1. A challenging time. This statement is not only true for business owners and individuals, but also for accountants. Together, we all faced, and are still facing, multiple short-term tax opportunities. The temporary nature of these opportunities makes planning challenging, to say the least. At the end of 2011, we lost the R&D credit, even though each year for the past 30 or so it has been retroactively reinstated and may again. Bonus depreciation on the purchase of new equipment is scheduled to disappear at the end of 2012. Uncertainty and short-lived changes to the tax code make it difficult to plan for the long-term. In addition to strategic challenges, the constantly shifting tax landscape often moves too quickly for technology. Even the most sophisticated tax preparation and projection software cannot keep up—leaving many practitioners manually entering new deductions and credits, and analyzing projections versus actual the “old-fashioned way.” So much for the efficiencies promised by technology.

2. Participate in your advocacy. We’re always on your side and want to help you take advantage of as many business and personal tax opportunities as possible. In addition to our proactive advice, the best way to take advantage is to stay informed. Use our hot topic email alerts to spark questions and discussions with us. We proactively bring you ideas, but we believe it’s equally important to educate our clients, because you know your business or individual situation better than anyone. So don’t wait until December or, worse yet, March to get involved. Take advantage of the resources our firm provides—in terms of information and engaged advisors. Talk with us early about maximizing your opportunities. And, as a general reminder, the simplest way to be involved is to review the returns we prepare for you before you sign!

3. Never let down your guard. This reminder became even more apparent to me this past tax season. At Cohen & Company, we hire and continually train the best in the profession. I believe that to be absolutely true. But we are not the only players in the system that will impact your return. Most of us often work with IRS agents, legal and other advisors important to our clients. Understandably, not everyone makes it their mission to stay up on the very latest changes in the tax code. That just means that we, as your tax advisors, need to remain sharper and more diligent than ever to remain at the forefront of tax knowledge and to stand ready to defend what we know to be right for our clients.

4. Onward and upward. So what now, as we approach the next tax season (which is how accountants actually track the passing of time)? The best general advice I can give is to take advantage of everything possible throughout 2012. Don’t wait it out to see how political regimes may or may not change. Tax reform is coming, but we just can’t know when and to what degree. Bonus depreciation on the purchase of new equipment remains a solid opportunity through 2012. There’s a significant opportunity to use the reunified $5 million estate, generation-skipping tax (GST) and gift exemption through 2012, and there are many other opportunities that may apply to your specific situation.

One final note: for more than 24 tax seasons, I have found that the most fruitful opportunities come from meaningful interaction with my clients. A good conversation will always be the genesis of a good idea — and a great partnership!

To talk about your upcoming tax season opportunities, contact Tracy Monroe at tmonroe@cohencpa.com or a member of your service team.


This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.