In 1984, the federal tax code was 26,300 pages long. Since then, 48,308 pages have been added to the tax code, bringing it to a whopping 74,608 pages as of April 2016.
Do you have that memorized yet?
While most tax systems have the capability to handle standard returns for clients, the way people earn and invest their money has changed dramatically in recent years. While there are numerous clients who receive a standard W-2 at the end of the year, and place a percentage of their earnings into a 401(k) or other retirement plan, there’s a significant increase in clients like the entrepreneur who receives multiple 1099 forms at the end of the year, but is also paying college tuition for their 19 year old son, while also adopting a child. They may also have numerous investment properties, and their spouse may have just started a home business.
That’s just for personal clients. What about non-profit clients? Corporate clients?
74,608 pages. That’s a lot of pages to wade through, even if you know what you’re looking for. But what if you don’t?
It’s fairly well known that the majority of an accountant’s time during the tax season is spent fielding questions from clients. While some of those questions can be answered easily, others may require a significant amount of research. Preemptively providing answers to clients can help to alleviate surprises at tax time. Providing your clients with a tax primer throughout the year can reduce stress for your client, and for your office at tax time.
If you’re feeling overwhelmed right now, you can relax, because a Tax Research system can help. Originally designed to provide relatively quick access to multiple tax code libraries, these systems have evolved as the tax code has grown, and as the job of a tax accountant has become more complex than ever before.
The systems reviewed in this issue commonly include additional tools such as the ability to annotate and add notes to documents, share documents and related materials with both clients and co-workers, and even integrate with tax preparation software. While simplifying research tremendously, these comprehensive systems also allow accountants to plan for tax season all year long.
The products included in the Tax Research review include:
- BNA Tax & Accounting Center
- Thomson Reuters Checkpoint
- Wolters Kluwer, CCH IntelliConnect
- The Tax Book
All of the products offer online research capability, with some of the products integrating with tax preparation software as well. While the tools and functionality vary from product to product, they all allow busy accountants to quickly and easily find the source documents they need in order to deliver the best service to their clients.
And remember, despite the promises made by Presidential candidates, both past and present; it’s doubtful that the tax code will be overhauled and simplified in the near future. In fact, it’s apparent that in recent years the tax code has become even more cumbersome, making it nearly impossible for accountants to stay on top of changes, modifications, additions and deletions that occur every year. While a complex tax code certainly bodes well for the future of the accounting industry, its complexity does nothing to make the job of today’s accountant any easier.
But a Tax Research system will.