Many types of businesses need accountants to audit their finances and balance their books on a daily basis. In fact, as the business environment grows in complexity, so too does the demand for these trusted advisers and their trusted credentials. Here, Jeff Beach, CPA, a partner at BKD CPAs & Advisors in Erie, Pennsylvania, talks about the accounting industry, the present tax season and recent tax law changes that could impact your bottom line.
You’ve been a CPA in the Erie area for more than 20 years. Please tell us about your experience and why you chose a career in the accounting field.
Initially, I was drawn to the technical aspect of accounting. I wanted to obtain a recognized professional designation as a Certified Public Accountant, soon realizing our profession required much more than just being technically competent. Our market contains organizations of all shapes and sizes and you must be an astute listener, problem solver and able to adapt to different personalities and situations. There is no one-size-fits-all solution. Clients look to you to help them work through
some of the most important decisions and challenges in their lives in a professional, credible and confidential manner. Providing this service has been extremely gratifying and rewarding.
You’ve been a part of BKD’s leadership in Erie for the past six years. Describe the firm, its footprint and the services it provides.
BKD has been a great fit for our office. The firm has what I refer to as a Midwesternstyle culture. Offices and subject matter experts go out of their way to assist one another. There is a culture of doing the right thing for the right reasons and the reasons are focused around our clients. We have 38 offices in 21 states stretching from Colorado to New York and Wisconsin to Texas. The ability to tap into true experts has been extremely helpful in areas such as international taxation, business valuation, employee stock owner plans (ESOPs), cyber risk and IT consulting, just to name a few. International tax is one area where you truly don’t know what you don’t know. Companies can easily run afoul of rules and make very costly mistakes or miss opportunities for savings. BKD has a very talented group in this area that we use on a weekly basis.
It’s been almost a year since the Tax Cuts and Jobs Act (TCJA) brought major changes to the American tax system. Please provide a brief update on the key provisions. What are some key changes affecting returns for the 2018 tax year (filed in April 2019) and the 2019 tax year (filed in April 2020)?
This act represents the most significant change we have had in over 30 years. There are many provisions that make fundamental changes in the individual and business tax world. Most of these changes will affect the 2018 tax year. I believe one of the most significant changes is the 199A business income deduction. This impacts most of our client base and probably most of the MBA members as it is focused on pass-thru entities such as Subchapter S corporations, partnerships, as well as sole proprietors, individuals, trusts and estates. In general terms, it provides the individual owner in these entities with a potential 20-percent deduction of the qualified business income being passed through to them. Certain types of business will not qualify for the deduction and, of course, there are numerous twists and turns in the calculation, such as the ability to aggregate certain businesses.
The Internal Revenue Services (IRS) just released four additional guidance pieces on this deduction on January 20, 2019. It’s a very complicated area with potentially huge tax savings.
Even with the TCJA changes, taxes aren’t necessarily straightforward. In your opinion, what is a good resource for keeping abreast of the new tax laws each year?
Most CPA firms have good resources on their websites to follow. At BKD, we have BKD Thoughtware, which is a service that clients and non-clients can sign up to receive business and tax information about their industry. Available are webinars,articles and videos to help them navigate the financial landscape. The Wall Street Journal’s personal finance section also provides a lot of useful and timely articles on taxes.
Of course, each taxpayer’s situation is different, so there’s no guarantee whether a tax return will look better or worse in the next year. What’s your best advice to others to prepare for tax season?
In preparing clients for this year, we have seen some come out winners with a lower tax bill and some come out losers with a higher tax bill. This is going to be a challenging year for all tax preparers. This year, more than ever, clients need to get their information into their preparer sooner than later.
For more information about BKD, visit www.bkd.com.