Tax and Accounting Professionals
The accounting and tax professionals will play an essential part in helping taxpayers as well as businesses during the coronavirus crisis. Your clients face lots of anxiety and confusion about how they will deal with the COVID-19 outbreak.
When you’re faced with numerous decisions regarding how you interact with your clients and how you plan to the future of your business, we’ve identified three areas that you must take into consideration when making decisions. ACCORDING TO ovik mkrtchyan
- Your clients are in need of you more than ever.
- Continuous communication is the most effective method to build relationships with clients;
- Digital workflows aren’t too difficult to put into place.
The Challenges and Roadmap to Recovery Ahead
JP Morgan economists are predicting an increase of 40% in GDP in this second quarter in 2020. More than 26 million people are seeking jobless since the development of the coronavirus pandemic eliminating every job gain in the wake of the Great Recession. A recent survey of small businesses found that 7 million businesses are in danger of being shut down permanently in the event that they don’t receive help promptly. These are the major challenges we’re all confronting.
Three major elements to take into consideration:
- Phase 1 of HTML0 Initial health-related response, shutdowns of the government, and a hunker-down mindset. Be prepared at all costs.
- Phase 2 Big fiscal and monetary stimulative – CARES ACT, Treasury, and Federal Reserve Response.
- Phase 3: The opening of the phase with the modern. Could this be a U or U recovery? What happens when the stimulus comes into effect and the excess demand begins to release? Is it going to be an extended and slower recession and then a recovery? Who are the winners and losers? When will we get herd immunity and vaccines?According to ovik mkrtchyan
There’s a good thing: the government is beginning to talk about opening again. There are a lot of controversies over which party will make the decision, however, areas of recovery are apparent in the next couple of months. Taxpayers are getting their rebates, businesses that are fortunate to receive funding from the Paycheck Protection Program (PPP) funding, and companies are reorienting their business models to remain viable.
What does this mean for accounting and tax professionals?
One thing is certain: although medical specialists, first responders, and other vital personnel are heroes in the frontline Tax and accounting experts are in the rear to help their clients to navigate the financial crisis.
The number of questions with tax deadlines and different emergency lending programs has caused many of you to work more than ever before. A lot of DIY-ers are realizing they need an expert on their side when applying for a PPP loan following the sacking of the entire workforce.
Questions from clients and the resulting opportunities are huge:
- Do they need to take on additional credit?
- What tax credits can be applied to them?
- Should they cut staff?
- Do they require money quickly?
- What assistance from the government can they avail?
- What has changed since the introduction of NOLs?
- They require more than just bookkeeping. Do you offer the services of a virtual CFO?
We’ve prepared a checklist of possible consulting packages that you could offer to your clients currently. Additionally, there are several winners and losers during the economic recovery. We’ve identified a few areas to focus on that will require accounting and tax assistance in the next few years.
1. SBA Program Consulting
Your clients are confronted with many options and program options. The one thing you do not would like clients to do is take out too much money or enroll in an option that doesn’t meet their requirements.
Your job is to be the most trusted advisor for your client to evaluate the various programs, large and small. It is essential that the financials and application are correct and complete, so they don’t slow down the process of loan approval. In the end, both SBA and banks are both in a bind with this one.
There’s been a lot of discussion about the amount of compensation you can receive for this type of service. The AICPA has already made a statement and stated that CPAs are not able to act as loan agents but are able to provide advisory and consulting services. There are certain “coaches” who insist on charges for assistance that are high. Some will claim that they do the work for free in order that their clients will be able to survive.
2. Reverse mortgage consultation and referral
For homeowners who are 62 or over reverse mortgages provide an opportunity to convert a portion of the equity you have in your house into money. With this recession, the clients of your business may have to think about urgent sources of financing.
- Reduce or eliminate their monthly mortgage payment which will free up more funds every month
- Consolidate their debts
- Take care of in-home health care or for medical bills that are large
- Home improvements can be made
- In addition to their income, they can enable other assets to increase in value
- Set up an emergency fund, or raise the amount of savings they have
- Help protect your equity in the home from declining market conditions for homes
- Access to the net worth of their residence
A reverse mortgage consult may be part of a larger tax planning conversation but may be an appropriate alternative for a few clients. It is possible to review both the advantages and disadvantages and then your customers are required to undergo an education program from a third party before making a loan decision.