Blog: Tax Prep

The December CPE scramble is not a discipline problem. It is a planning problem, and it produces the same two bad outcomes every year: hours taken because they were available rather than because they were useful, and a state-specific requirement discovered too late to satisfy properly.

Summer fixes both, for a reason that has nothing to do with virtue. You have capacity in July that you will not have in December, and the courses worth taking — the ...

The problem with mid-year tax legislation is not finding out about it. Every provider will email you.

The problem is that by the time you read the analysis, some of your clients have already taken actions you cannot reverse — an estimated payment computed on the old rules, an entity election made or missed, a transaction closed in the wrong quarter, a plan adopted or not adopted. January is when you report it. August is when you can still change

Accountants present what they prepared. Audiences need what they must decide. That mismatch is the whole problem, and it produces presentations that are technically flawless and functionally useless.

The deliverable here is understanding, not accuracy. A correct presentation nobody follows has failed at the only thing it was for.

Start With the Decision, Not the Statements

The diagnostic question that reorders everything: what is this person

Our post on defined benefit versus cash balance designs covers the structural comparison and concludes that cash balance is the better answer for most closely held clients.

This post covers the decision that follows: whether to actually do it — how the deduction works, the interaction most analyses omit, the modeling that has to happen first, and how it ends.

How the Deduction

Return review is simultaneously the highest-value and worst-resourced step in a tax practice. Reviewers are the bottleneck, review happens under the most time pressure of any part of the process, and the errors that get through are usually mechanical rather than judgmental — a figure entered wrong, a schedule omitted, a carryforward that did not roll.

That is precisely the class of error software handles well. So the opportunity here is real, and it is narrower and ...

Start with the arithmetic, because it changes the strategy.

A seasonal preparer carries a fixed cost — recruiting, onboarding, systems setup, training, supervision, and review time — against a limited productive window. Run the break-even honestly and many seasonal hires do not clear it in their first year, once senior review hours are costed properly.

Which produces the insight that should govern every decision below: ...

Every firm needs a season-opening briefing, and most firms build theirs from a webinar in mid-January — which is late, because by then the decisions the briefing should inform have already been made.

This post is about how to build one, and specifically how to build one that survives the thing that ruins season plans: guidance and forms that arrive after the season has started.

The Date Structure, and What Actually Moves

Four

Year-end planning conversations go wrong in a predictable way: the client wants to know what to buy, and buying things is the least valuable lever available.

The genuinely useful year-end work is timing, entity and compensation decisions, and elections with deadlines — and most of it produces a benefit that recurs rather than a one-time deduction that costs a dollar to save thirty cents.

This post covers what actually moves the number in the fourth quarter, ...