[ad_1]
Alvaro Gonzalez | Moment | Getty Images
Why there’s an accounting shortage
Accounting has a reputation of long work hours coupled with stressful deadlines, leading college students to opt for other lucrative roles in finance like investment banking, consulting or data analysis.
The declining birth rate also plays a role into the low supply of accountants, according to Henry Grzes, lead manager for tax practice and ethics with the American Institute of CPAs.
“It is reflective of a declining population of individuals who are pursuing those degrees that would allow them to sit for the CPA exam, but that’s coupled with the fact that there’s less students in general,” Grzes said.
While the results from 2020 and 2022 could have been impacted by the Covid-19 pandemic, Grzes says the bumps of new test takers in 2010 and 2016 reflect a change in the CPA exam.
Therefore, to address the decline of new professionals in the field and “expand the CPA pipeline,” the format of the CPA exam will face changes that will go into effect this year, Grzes said.
In 2024, the new CPA exam will consist of three core sections: Financial Accounting and Reporting, Auditing and Attestation, and Taxation and Regulation. Candidates will take an additional exam of the discipline of their choice: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC) and Tax Compliance and Planning (TCP).
“That’s the reason the exam was changed: to allow more people to have that designation. The CPA designation is a very important standard,” Grzes said.
However, these efforts will take time to materialize in the market. For now, here are some things you can do if you need an accountant this tax season:
1. Broaden your search to enrolled agents
If you couldn’t hire an accountant or CPA to handle your taxes, enrolled agents may be a safe bet.
Enrolled agents are experts who focus solely on taxes and must pass three exams (an individual exam, a business returns exam and an ethics exam) that are offered directly through the IRS, said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
Some tax preparers only carry a preparer tax identification number or PTIN. While they can certainly prepare and file your tax returns, they can’t represent taxpayers before the IRS in case there’s any notices or an audit, add Lucas.
However, tax attorneys, CPAs and enrolled agents can represent taxpayers.
“If a client receives a a notice, I can contact the IRS on their behalf,” Lucas said.
2. Consider online filing options
There are a number of tax filing options available for consumers online, that are free and paid.
Paid tax software may have options that offer you some expert support, such as TurboTax, H&R Block and TaxSlayer. These platforms all have access plans that offer some kind of professional support for a higher fee.
However, before your type in your personal information into external tax filing platforms, make sure you have a full understanding of the costs and the expertise of the platform’s experts providing tax help.
3. Look into local community resources
The IRS has a programs that offer free basic tax return preparation for qualified individuals: volunteer income tax assistance, or VITA, and tax counseling for the elderly.
Make sure the volunteer workers have completed the annual filing season program in addition to having a PTIN.
“That will at least give baseline knowledge to prepare a simple individual tax return,” Lucas explained.
4. File your taxes later in the year
If a CPA you hope to work with isn’t taking on new clients during tax season, see if you can negotiate for help later in the year, Lucas said.
To get an automatic six-month extension, you have to file Form 4868 online through IRS Free File. Or, you can make an electronic payment and select “extension” as the reason, adding an automatic six-month extension without filing Form 4868. Keep in mind that you still need to pay taxes owed by the April deadline.
In the meantime, make sure to have all of your documents in order, it’s “the number one thing to stand out,” said Lucas.
Putting someone through the additional task of organizing your records will not only give the tax preparer more work, you might get a higher fee.
“[Those] who just hand you all their receipts and their bank statements and now you have to do the book keeping on top of it … that’s very much frowned upon,” Lucas said.
[ad_2]
Source link
