CPA’s and EA’s (Enrolled Agents) at SK CPAs have a commitment to continuing education on new tax laws.
I reviewed the 2018 tax returns for a small construction contractor prepared by an uncertified preparer. The business was profitable, so I expected a nice large pass thru entity deduction under the new tax law. When I looked at page 2 of the 1040 form, it was missing.
The preparer had missed the deduction, because he didn’t understand how the new deduction works. He trusted his tax software to tell him if the deduction should be taken. I knew he missed entering a vital piece of information. His software was fine. His knowledge was not.
Spotting this missed deduction got a new client for SK CPAs and a $10K refund for our new client on an amended return. But worse than missing the $10K refund was the planning opportunity lost to optimize the new deduction. A little planning before the end of 2018 could have saved another $4K in taxes. You can’t amend a return for a missed planning opportunity.
Sadly, dated tax knowledge is the norm for preparers not dedicated to continuous learning. I attended the IRS National Tax Conference this past summer. In the summer of 2019, most of the attendees were just learning about the tax law that took effect January 1, 2018. Do you think they missed a few things this past tax season?
When the new tax law was passed, our firm responded by:
- Taking training courses on the new tax law,
- Holding internal training sessions on the new law,
- Speaking to local organizations on the new tax law,
- Educating clients on the effects of the new law.
While we were preparing 2017 tax returns, we were discussing the newly passed law with clients and how it might affect their 2018 tax situations.
That’s a commitment to continuous learning. This is reason #87 why you should have a CPA firm prepare your tax returns.
Thanks for reading!
Frank Stitely, CPA, CVA