Please ensure Javascript is enabled for purposes of website accessibility

Are You Preparing That Tax Return the Same Way You Did 5 Years Ago?

Tax return

Most likely, the answer is no. Remember the days with paper client files, colorful sticky notes, and calculator tapes? If you think about it, the “old way” of preparing tax returns was not that long ago. Change is happening and it’s happening fast.

In just 5 years, the tax preparation process has changed a lot. It went from paper documents and paper filing to electronic document storage and electronic filing (except for some old-school states and random filings). It then shifted to importing tax data into tax return software with one click (with some data manipulation, of course). Then it shifted to the initial tax preparation and data import process being outsourced overseas. All of this in 5 years. What will the next 5 years look like? How much time will you be spending on the actual compliance process in 5 years?

At the AICPA ENGAGE conference, Kimberly Ellison-Taylor and Barry Melancon gave an update on the profession. According to Accounting Today, American Institute of CPAs president and CEO Barry Melancon said, “We will not recognize our profession in the next 10 years – but it will still be critical.” He continued, “And honestly, I said 10 years so it wouldn’t scare you so much. It will probably be unrecognizable in five.”

You may want to say, “There will always be compliance work. The government still needs their tax returns.” This is true. Melancon said, “Most of you think your competition is the firm down the street but it may well be a company that doesn’t exist yet.”

This has already begun for virtual individual tax preparation services such as TaxFyle which wants to be “the Uber for taxes”. Of course, this is only for individual tax returns but it’s just the beginning in terms of industry disruption.

What it all boils down to is a reallocation of time. Instead of spending our time on data entry and data manipulation, we will be spending more and more of our time on providing strategy and consulting services to our clients. The firms that view this as an opportunity will reap the results. The firms that type in everything by hand and artistically color code their paper client folders may not.

What do you think? How has your tax preparation process changed in the past 5 years at your firm? What will the tax preparation process look like in 5 years at your firm?

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

never lose hope graffiti

Local Man Offers Terrible Advice to Desperate New Mexico Taxpayers

Today is March 31, meaning there are 18 days left to file (198 days if you followed your CPA’s recommendation to kick the can down the road with an extension) and it is not the time to be shopping for a tax preparer. Add to that — and this bit is for any taxpayers who […]

angry stress ball

Busy Season Problems: You Deducted What?, Dumbest Conference Idea Ever, Clients Taking Ls

It occurred to me the other day as I was setting up my bullet journal spreads for next month that it is almost April. How’d that happen? As I was casually drawing out colorful little calendar boxes, checklists, and doodles without a care in the world I remembered that there are a good number of […]