Book of lists: Tax bill has created more work for accounting firms
In late December 2017, President Donald Trump signed into law long-promised tax cuts meant to promote economic growth. But the Tax Cuts and Jobs Act has had some ancillary effects.
For New York’s largest accounting firms, the biggest tax overhaul in decades has put significantly more work on their staffers’ plates. David Lifson, a certified public accountant and a partner at Crowe, said keeping up with changes requires about 50% more time than it did in 2017. And clients are returning with myriad questions, turning tax season into a yearlong process.
“Clients want to make a plan for three to five years, but we’re not fortune tellers and wizards,” Lifson said. “There’s always uncertainty in tax law because there are changes all the time—and there’s still the likelihood of much more.
“The changes on Dec. 22, 2017, were just the beginning,” he added, “as Republicans introduced three more bills nine months later. Clients can take positions today, but they have to keep checking with me to see if anything has changed.”
One major change from August 2018 was that the IRS put a limit on how much can be deducted as charitable donations to a state fund, a Gov. Andrew Cuomo–spurred adjustment intended to mitigate the effect of the new cap on state and local taxes deducted from federal returns. New York and neighboring states adopting similar programs are now suing the federal government to have the allowance reinstated. Lifson doesn’t think the states’ plan will stand up in court, but the continuing political left-versus-right battle makes it difficult to give advice.
“New York tried to take advantage of an informal loophole with very large deductions,” Lifson said. “Potential savings is over 120% of the cost. But any taxpayer that attempts to use the program runs the risk of a federal challenge. So even though the mushroom might be really tasty, it might make you sick.”
Our position as a market leader requires that we manage high standards of quality and efficiency. We see Russell Bedford as a firm that knows how to meet our needs and standards, professionally responding to the challenges we face in an industry as dynamic as oursSergio Duplan, Area President Latin America and Caribbean, Alcon, Novartis