Using technology to assist with year-end tax planning.

Author:Lagarde, Brandon

The CPA's role in the new digital environment is ever-changing. Technology has helped to automate certain functions that were historically performed manually. This trend in automation will continue to evolve. However, CPAs can never lose sight of what makes them valuable--being trusted advisers.


Increased automation will allow CPAs to dedicate more time and energy to the value-added services that clients desire and need. Automation and big data tools will allow CPAs of the future to spend more time critically thinking about a client's tax positions and issues that could help mitigate tax liability. Has a client ever asked a CPA how to pay more taxes? None of the clients the author has worked with have. The more common question is, "Why am I paying so much in tax this year?" Clients want their trusted adviser to be proactive in the tax planning process.

Comprehensive and proactive year-end tax planning can be overwhelming. Over the past several years, CPAs have been faced with last-minute tax-extender legislation, the prospect of comprehensive tax reform, and a changing political climate that has made it extremely difficult to properly plan. This year is no different. Comprehensive tax reform is on the agenda again. In addition, Congress will have to address several tax-extender items at the end of the year if tax reform is not accomplished. However, despite the uncertainty, CPAs, as trusted advisers, must continue to proactively plan for clients.

The most effective tax planning solutions are those that are tailored to a particular client. If the CPA sends out a general, year-end tax planning letter, clients are less likely to understand the tax implications of each item or whether a particular strategy may help them reduce taxes. The client may very likely read the letter but not act on the information. With the proper use of technology, a CPA can become the trusted tax adviser that all clients want and need. This column focuses on developing a year-end tax planning strategy by using technology to maximize effectiveness and efficiency.

Develop a year-end communication plan

Many CPAs have "stock" letters or other year-end tax planning materials that they send to clients toward the end of the year. This material often covers a wide variety of topics, ranging from timing of income and expenses to gift tax planning and everything in between. However, this material is generic. In many cases, the material is also too long...

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