Accounting
Art of Accounting: The end of this year’s tax season
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My original headline was “The end of tax season,” but that is not so. It is the end of this year’s tax season.
If you were designing a CPA practice from scratch, what would you do about tax season? Would you keep it as it is for you, or would you make some changes or possibly eliminate it? It is doubtful you would eliminate it. It is an essential part of what we do and generates substantial revenue and connections with clients and provides growth opportunities for staff. For those looking to grow their practice, it gives them an inside look at their client’s personal, financial and investment affairs.
I’ve always liked tax season for all those reasons. When I was employed as a staff accountant I had no control over my added hours and did what I was supposed to do. But it was a lot less burdensome than it is today. My overtime was three hours for each of two nights a week and five hours on the weekend and this started the second week of January. A downside was that there was no tax work in January and I spent my time with “busy” projects. When I had my own practice (with partners), tax season never started earlier than the first week in February with a weekend day from 9:30 to 5:00. The nights started when the work was there to be done — usually not until the middle of February.
We also gave staff a floating weekend day in February and the weekend after March 15; and we paid for every extra hour worked on the next paycheck. We never gave a bonus but gave a nice cash gift to everyone on April 15 before we “closed” the office. We stayed closed for the next day too. Tax season was a nice time of year, and I do not remember many complaints. We needed our staff to work as hard as they could but deliberately enough so they would avoid errors. Errors were the bane of our existence and were to be avoided at all costs. We did good with tax season!
Getting back to you, what would you do to make tax season enjoyable for you and your staff to experience the benefits from it? What changes would you make? Do you have the resolve to carry those changes through for the entire tax season? We did! We did these things, not because we liked to, but because we had to. We were running a business. That business happened to be a CPA practice, and one of our service lines was preparing individual tax returns.
We understood that if we were to grow, we would need staff to do much of our work. We also understood that what they did needed to be done the way we wanted them to do it. We set up processes, procedures and checklists for everything the staff would do. They were told they had to follow them. Our model was the McDonalds restaurants where it worked because everyone followed the processes, procedures and checklists. We wanted to replicate that McDonalds mentality and worked hard at it, training our staff to work the way we wanted them to.
Not following a process, procedure or checklist was a big deal; a violation of the terms of their employment, and we held them to it. Another thing that was a must was they needed to check their work before they handed it upward for review. We showed them how to check their work and expected them to check it. If they didn’t, they violated the terms of their employment.
I calculated that correcting errors on tax returns added a day’s work every week. Eliminating errors reduced their work seven or eight hours a week. That was time they had for themselves, since they needed to only work the hours necessary to handle their work assignments. No one was penalized if they went home early or worked less than some others. Some staff members worked quicker than others and some slower, but no one worked extra because they had to stay to correct their errors. Some did, and if it became a regular habit, they were no longer permitted to work for our great firm. We did not believe it made sense to carry nonperformers just to have a “body” looking like they were doing work.
It was fortunate that all our partners bought into our methods. Perhaps not happily when a new procedure was established, but as the results came in, they became believers. To be frank, not every manager did, and they were soon taken off our payroll.
I certainly do not know how most firms operate, but I know how a lot of firms do. The successful ones have procedures and make sure they are followed. There are a lot of other reasons that contribute to success, but this is a big giant step toward having a successful tax season.
I opened this column asking how you would design a successful tax season. You should work on that, and having everyone follow your processes, procedures and checklists is a fine way to start.
Do not hesitate to contact me at
The federal government’s financial condition worsened by $4.7 trillion in the past year, according to a new report released to coincide with Tax Day.
The annual
“Our country’s financial condition continues to spiral out of control, and taxpayers are left holding the bag,” said TIA CEO Sheila Weinberg in a statement Tuesday. “On a day when Americans are asked to be transparent and accurate with their finances, their government fails to do the same.”
Despite the enormous size of its commitments to Social Security and Medicare, the U.S. Treasury Department only reported $241 billion of them on the official balance sheet because, according to government documents, recipients aren’t legally entitled to benefits beyond the current month, allowing future payments to be reduced or eliminated by law.
The report’s release comes amid efforts by the Elon Musk-led Department of Government Efficiency to slash the size of the federal government, virtually eliminating entire agencies while threatening cutbacks in Social Security, Medicare and Medicaid offices and personnel to aid seniors.
The report warned that due to inaccurate and nontransparent budgeting practices, Congress and the American people lack the information needed to make informed decisions about taxes, spending, and long-term policy. Weinberg is advocating for full accrual budgeting and accounting, which would include the true cost and projected growth of government programs. “This kind of transparency would be the first step in regaining control of our nation’s finances,” she said.
The Financial State of the Union report gives the federal government an ‘F’ grade for its fiscal health and asks Congress to adopt honest accounting standards to provide long-term financial sustainability. Truth in Accounting is also encouraging citizens to
Rep. Young Kim, R-California, and Haley Haley Stevens, D-Michigan, reintroduced bipartisan legislation to recognize accounting as a STEM field like other science, technology, engineering and mathematics-related subjects and enable K-12 STEM funding to be used for accounting awareness and education.
The legislation, known as
“STEM educational opportunities are vital to our economy and national security, helping students get good paying jobs and boosting our nation’s competitiveness,” Kim said in a statement Tuesday. “Accounting is a STEM field important to all U.S. industries, and building a CPA pipeline is more important than ever in our dynamic, 21st century economy. I’m proud to lead this bipartisan bill to uplift students with the skills they need to contribute to our workforce and support our future economy.”
Proponents hope the bill will pass this time and encourage more young people to pursue accounting careers.
”Quality, accessible STEM education is the path to a good paying job and all students should have access to it,” Stevens stated. “That’s why I am introducing the Accounting STEM Pursuit Act of 2025, which will introduce students to opportunities in the accounting profession early on to strengthen the future of this vital industry and ensure that accounting, a field increasingly intertwined with technology, is accessible to all students.”
The AICPA noted that over time, technology has evolved and many professions, including accounting, have evolved with it. Digital technology tools are automating and improving many old accounting tasks, opening up avenues for more creative work such as data analysis, advising on business decisions and hunting down fraud. STEM recognition for accounting at the K-12 level, in tandem with the potential for existing STEM K-12 federal funding to be used for accounting awareness and education, would affirm that the accounting profession is qualified to assess the technological world businesses are in today and expose a larger cross-section of students to potential careers in accounting, while growing the profession’s pipeline.
“For years, STEM curriculum has been a driving force in our education system, providing students with the education needed to develop critical skills that will allow them to compete in a global economy. Accounting has always embodied the values of STEM education, and we believe now is the time to recognize accounting as a STEM curriculum,” said Susan Coffey, CEO of public accounting at the AICPA, in a statement. “STEM recognition for accounting will help expose students from all backgrounds to the profession, strengthen the accounting pipeline and provide increased opportunities for students in various communities. We thank Representatives Kim and Stevens for their leadership and dedication on this issue and urge members of Congress to support this legislation.”
Republicans in the White House, Senate and House are drafting analyses on how best to craft a new tax bracket for the wealthiest Americans, work that signals the GOP under President Donald Trump is seriously considering ideas to raise taxes on the rich.
The House proposal would set the new rate at 40% for taxpayers earning $1 million or more a year, according to people familiar with the proposal. Economic policy aides in the Senate and the Trump administration have been studying the idea as well, according to people briefed on the work.
A White House official, speaking on the condition of anonymity to discuss private conversations, said Trump is open to the idea of a new top tax bracket. However, the person emphasized that the higher rate should kick in at a threshold far greater than $1 million.
“We are investigating and having discussions with Congress about a variety of potential offsets,” Deputy Treasury Secretary Michael Faulkender said Tuesday at an event in Washington, noting that there are “many, many ideas” being studied to minimize the total cost of the tax bill though no decisions have been made.
Treasury Secretary Scott Bessent said in an interview Monday with Bloomberg News that
A Senate Finance Committee spokesperson declined to comment. Representatives for the White House and the House Ways and Means Committee did not immediately provide comment.
The discussions about a new tax bracket for millionaires come as Republicans are looking for ways to pay for a sweeping tax bill by the end of 2025 when several of Trump’s first-term cuts expire. The current top tax rate is 37% for individuals earning more than $626,350 a year.
The higher rates on top earners could be a way to offset the cost of an expanded state and local tax deduction, a popular and politically important tax break for swing district Republicans in New York, New Jersey and California, one person said.
The SALT deduction benefits skew toward higher-earners, so offsetting the cost with a millionaires bracket would serve a way to minimize the tax savings flowing to wealthy Americans in the bill. Republicans are considering expanding the SALT cap from $10,000 to as high as
Trump, in addition to renewing his 2017 cuts for households and privately held businesses, wants to pass campaign proposals, including eliminating taxes on tips and overtime pay, and creating new deductions for seniors.
Republicans on Capitol Hill are trying to make his wish list come true, while putting some limits on the boost to budget deficits.not supported.
Pass-through problem
Raising the top tax rate is likely to spark some backlash from business owners of partnerships, LLCs and other pass-through entities who pay their company tax bills based on the individual rates in the tax code. Senator Thom Tillis, a North Carolina Republican, has said Congress should put in limits on a top tax bracket to reduce levies of those privately held companies.
A new millionaire rate would also be an extraordinary break from Republican orthodoxy which has long espoused the idea of no-new-taxes.
Groups including Club for Growth and Americans for Tax Reform have spent years from powerful perches in Washington making sure Republicans did not raise taxes. But the party has changed under Trump and has taken on a more populist bent embracing ideas that were once taboo.
Still, there are swaths of the Republican Party opposed to the idea.
“It’s not going to happen,” Americans for Tax Reform’s Grover Norquist said on Tuesday, speaking at an event before Faulkender. House leaders, including Speaker Mike Johnson, have also downplayed the idea, saying they are looking for ways to cut — not raise — taxes.
“We’ll have to see,” Johnson said last week when pressed by a reporter.
National debt keeps growing, but not fully accounted for
Congress reintroduces bill to make accounting a STEM subject
Millionaire tax-hike talks gain steam as Trump signals openness
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