Financial PlanningTaxes

Seven observations from COVID tax season

Many of us tax professionals are wrapping up the most challenging tax season of our lives. I’m pretty well on pace to finish early for the deadline on the 15th so I paused to write a few short reflections:

  1. At least one client won’t file taxes this year primarily due to depression. A few others haven’t responded at all; I don’t even know if they are alive. That’s disturbing becasue we used to communicate fairly regularly.
  2. Another has lost mental competency and should be considered as senile, IMO, but hell, I’m only the accountant. There’s nothing I can really do (or am motivated to do) immediately. I’ll probably initiate a conversation about custodianship when the opportunity comes up. It’s a delicate situation.
  3. A few skipped the financial planning component we usually do together and filed their own taxes. I feel like that’s a mistake but obviously I’m biased and conflicted in that viewpoint. I don’t know the motivation. But if they don’t see value in our work then I’ll believe them at face value.
  4. One tax return I had to do almost entirely on estimates based on COVID-related issues.
  5. A couple of new entrepreneur clients reminded me once again that new business owners don’t know the difference between business accounting and tax preparation and that it falls on me to handle this education and explain the consequences of not distinguishing the two.
  6. I had fewer new tax preparation clients this tax season then ever before. Overall number and revenues are down. That might be offset by investment and financial planning work which tends to be a multi-year engagement for me. Looking back it’s becasue I didn’t market this service.
  7. Clients’ overall collective tax results and effective tax rates were pretty much unchanged from 2018 to 2019.