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It’s a taxing season for CPA firms

taxesWith less than two weeks left before tax filing deadline, CPA offices across Mississippi are feeling the crush. These pros, however, have learned to cope with the yearly pressures of tax season. They also took time to discuss changes and trends they’ve observed this year.

Jessica Cooley with the Jackson metro area firm of GranthamPoole says the firm’s work/life balance philosophy as one of its core values is helpful. “Our firm makes an intentional effort to manage workloads and assignments in a shared manner that allows our staff to keep up with family time and personal commitments,” she said. “Listening to my 4-year-old chatter about her day on the way home is something I would miss out on if our firm did not offer the flexibility that it does. The firm also supplies lunch and snacks on site each day during tax season.”

On a personal level, she focuses on making time to be with family and keeping up with church and other community volunteer commitments.

“Those connections keep me from being overwhelmed by the amount of work that needs to be done each day.”

Paul Calhoun

Paul Calhoun

Paul Calhoun with the Haddox Reid Burkes & Calhoun firm in Ridgeland says maintaining a regular routine is a great help. “I make sure I get some exercise several days each week and rest on Sunday,” he said.

Jerry Levens with the Gulfport firm of Alexander Van Loon Sloan Levens & Favre also tries to stick to his routines as much as possible. “That’s including volunteer commitments and exercise routine by just working a few hours extra each work day,” he said. “For our CPA firm we do a really good job managing our tax season projects, in fact generally speaking none of out staff works any weekends during tax season and that covers about 35 professional staff, of which 25 are CPAs. We are envied by most of our professional colleagues.

“This allows employees to preserve some quality-of-life features with their family commitments in light of our busy season. My wife, Cindy, reminds me often that to the rest of the world it is not tax season; it is just the first few months of a new year. That helps keep me grounded for the busy season.”

Jerry Levens

Jerry Levens

Levens points out that 2013 is the first year for two new “surtaxes” under

the Affordable Care Act, which is making an impact – one is for the .9 percent on earned income and another is 3.8 percent surtax on net investment income. “These additional taxes apply to a couple with AGI greater than $250k ($200k for a single person),” he said. “Additionally new for 2013 is a new higher federal tax bracket of 39.6 percent (previously top bracket was 35 percent). This affects couples with AGI greater than $450k and a single person at $400k. Also new for 2013 long-term capital gains, federal rates increased from 15 percent to 20 percent.”

Calhoun says the Affordable Care Act is confusing to clients as they wonder how it affects them for 2013 and future years. “For 2013, many clients are seeing their taxes increase by the new Medicare contribution tax of .9 percent on earned income and self-employment income,” he said. “In addition, some are paying the new 3.8 percent tax on net investment income, and how net investment income is calculated is confusing to many people.”

Jessica Cooley

Jessica Cooley

He adds that more clients are seeing higher amounts of medical costs as the result of incurring long-term care costs. “In addition, some clients are seeing their taxable income increase as the result of the phase out of certain itemized deductions and exemptions. The tax rates may not have changed but their taxable income and income taxes increased,” he said.

Levens observes that clients have been visiting with their investment advisers – something he strongly encourages – on how to position or rebalance their investments in light of these additional tax burdens. “Clearly for more clients, planning is a key part of a good tax strategy, not just completing the return each year,” he said.

Cooley says this is the time of year when clients need CPAs most. “It’s satisfying to get to see them and ease the pain of tax filing,” she said. “Accounting is not just about numbers but also about people and what helps them meet their financial goals.”

Many GranthamPoole clients brought in their information earlier, she says. “However, the government shutdown in late 2013 delayed the beginning of filing season as it coincided with the IRS’ timeline of updating their programming systems,” she said. “The Affordable Care Act, on everyone’s mind this year, set into motion additional taxes on net investment income as well as a new Medicare surcharge tax on earned income. We also see more and more clients handling all of their filing and refunds electronically.”



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