A good accountant always looks ahead. From continuing education via regular accounting classes to sharpening your skills by way of independent accounting research, you should always work to stay ahead of the needs of your clients. Accounting classes can only do so much to prepare you, however, and much of the accounting research you do will have to be focused on real-world issues your clients will be bringing you in the coming year. Here are three of the major accounting issues you can expect to face in 2014.
The first area your clients are probably going to need help in will be the upcoming changes to existing tax law. These changes, which have already been ratified by Congress and are set to be implemented in the coming year, will dramatically affect the way your clients plan for their 2015 returns. With revenues projected to top $3 billion for the first time in the nation's history, accounting classes would do well to take the following changes into account:
- Standard deduction: The standard deduction, used by around two-thirds of taxpayers, is set to increase from $6,100 to $6,200 for individuals, and from $12,200 to $12,400 for married couples. If this seems like a minor shift, consider that two-thirds figure. Tens of millions of taxpayers will have to reevaluate whether it's worth itemizing 2014's deductions.
- Payroll taxes: For several years, wage earners have enjoyed a temporary reduction in their payroll withholding tax, from 6.2 percent to 4.2 percent. This cut will expire in 2014, causing many of your individual clients to reassess their budgets.
- Capital gains: The capital gains tax is set to jump from the current 15 percent to 20 percent. While this marks only a slight increase in total rate, your business clients will need help restructuring their portfolios to avoid the worst impact of the hike.
Another major area your accounting classes probably didn't prepare you for is the looming debt crisis. Yes, the debt ceiling is back, and it's set to cause trouble in January. While the PR disaster of the last shutdown and default crisis proved so politically catastrophic that an actual default is somewhat less likely this time, your prudent clients will have to plan for the potential upheavals.
Planning ahead is at the heart of the curriculum in any accounting classes, and it's probably at the heart of your practice as well. The third, and in many ways most critical, issue for accountants in 2014 will be laying the groundwork for fiscal 2015. Some of this will be simple accounting housekeeping, but there will be more than a few clients who need total financial overhauls.
With the recovery slow and uncertain, every client you see through 2014 will have the same question, though they'll be asking it in different ways: "what's the outlook for next year?" By attending regular accounting classes, doing your research, and keeping abreast of changes to tax law, you'll be in a position to give them an answer.
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