Taxpayers will need extra help with tax law change in 2021
Congress passed many tax law changes last year that are applicable to 2021 returns. Some of the biggest center around the advance child tax credit payments, the child and dependent care credit, stimulus payments, the earned income credit, Paycheck Protection Program loans, and paid sick and family leave credits.
As of the latest update in December, the IRS is still working through a backlog of over 6 million individual returns, which may cause complications when filing a 2021 tax return. Tax preparers may face their most grueling tax season to date.
Although impossible to prepare for everything, including some other expected upcoming legislation like the Build Back Better Act, there are steps tax preparers can take now to ensure a successful 2022 tax season.
- Review and update website information
- Your website is where new clients are most likely to look for more information. Make sure your contact information is up to date, including email address(es), phone number(s), staff names, hours of operation, fax number, etc.
- Test all virtual and software systems (i.e., Zoom, tax software, etc.)
- There’s nothing worse than having technical problems minutes before a virtual meeting is set to begin. Test your systems ahead of time to download any updates or explore new features. Along the same lines, you should download any updates for your tax software before you begin meeting with clients.
- Review written data safeguard plans and procedures
- This one’s not only a suggestion, but the IRS requires tax preparers to have a written data security plan to protect their clients’ data. Review this plan and update as necessary.
- Begin proactively setting up client meetings
- If you have repeat clients, getting them on the schedule now will ensure they get the support they need, and you can more easily accommodate the inevitable walk-in clients you’ll get this tax season, as more taxpayers who have prepared their own taxes in the past are expected to seek professional help due to the complicated updated tax rules.
- Complete update education on complicated or popular topics (i.e., courses on applying the earned income credit, reconciling child tax credit advance payments, etc.)
- It’s important to stay up to date on tax topics and education. There are a number of webinars available through the National Association of Tax Professionals (NATP), including Are You Ready for Tax Season, which reviews tax law updates necessary to understand for completing 2021 returns.
- Join a supportive tax industry community
- Joining a supportive community can help alleviate stress if you need to vent or can serve as a useful research tool as you make your way through tax season. NATP has a very active Facebook group for tax professionals, and NATP members receive tax season support unmatched by any other association, including free research questions, tax webinars, tax publications and more.
The National Association of Tax Professionals (NATP) is the largest nonprofit organization that works exclusively for tax professionals. We serve members through education, advocacy and community, providing the tools they need to navigate the tax code and the insights the media can trust.
Looking for a tax expert? Tom O’Saben, EA, director of tax content and government relations at NATP, is available for phone or video interviews to discuss federal tax topics, including tax law change and its implications, taxpayer issues, tax preparer regulation and more. To schedule an interview with O’Saben, contact [email protected] or [email protected].