What Happens In The Tax World At The End Of A Calendar Year?

Something interesting happens during this time of the year. First, all those hundreds of IRS tax forms and their related instructions that we know about, are mostly getting updated and those newer versions start getting released. Generally, the IRS starts releasing these forms around Thanksgiving time. That’s when the tax preparers expect to see the new versions of forms. Tax professionals look forward to this time of year as it clarifies a lot about previously confusing changes to the tax law.

Second, Congress and the political administration have to deal with expiring tax provisions. In other words, there are temporary tax provisions every year that are implemented as a result of the current economic lay of the land. It’s quite common to have certain provisions that are created for just one tax year. When Congress comes into session, around Thanksgiving till New Years (January 1st), the lawmakers have to decide which tax extenders will be left to expire and which laws will be extended. This process affects a lot of the final law, and influences the final provisions which are going to go into effect in January of the new year which is when the tax season starts.

When Do Students Learn About The Latest Provisions On The Tax Law?

As an IRS approved provider of continuing education of tax preparation, this is the time of year when National Tax Training School offers annual updates and refresher courses. Additionally,  when we teach about 2022 forms which have not been available up until this point, the fourth quarter is the time when we start integrating the newer forms into the courses. On a related note, tax software developers are extremely busy at this time of the year because they have to integrate these new forms into their offerings. These companies have a small window from Thanksgiving until the end of the year to update their software and tax programs and integrate the new forms and calculations. All this is what happens behind the scenes in the tax world at this time of the year.

What Are The Advantages Of Starting A Career In Tax Preparation During This Time Of The Year

Professionals thinking about a new career in tax preparation at this time of the year have the advantage of actually becoming familiar with things that are current, live and happening right now. In other words, one is dealing with the practical and timely vs. the theoretical. It’s much more imminent given that things are happening just around the corner. Congress at this time is passing laws, and figures, rules and numbers are getting finalized. Individuals that are ready to learn taxation are actually more tuned in, and can relate much better to the news and to the changes. 

At this time of the year, as we get close to tax season, people start asking tax questions. Clients of tax professionals seek tax advice pertaining to this current year and also how to prepare themselves for the upcoming new year.

One has to position themselves at the onset of the upcoming year regarding their spending and purchasing as to how it affects them financially in their tax bracket. Everyone wants to make sure that their business expenses, investments, earnings and income are set up properly to their advantage for the upcoming year. 

As an example, if there are any questions regarding business deductions that are set to expire, the tax preparer would advise to spend more now since they will get the immediate benefits vs. waiting to expense after January 1st when they are no longer valid. 

Should A Tax Preparer Participate in Continuing Education At This Time of the Year?

Yes. The IRS has designed a voluntary continuing education program called the Annual Filing Season Program (AFSP) and National Tax is an approved provider. The program helps the practicing tax preparer keep up with all changes, reinforces their knowledge of common tax provisions and reminds tax professionals of their ethical responsibilities. Although this is not required by law, there are significant benefits to the course. 

Benefits of Participating in Continuing Education:

  • Becoming current with changes to the new tax laws
  • Getting listed in the IRS directory for tax preparers
  • Better representational rights for their clients before the IRS

In order for tax preparers to take full advantage of this offering, the program needs to be completed by December 31st. 

What Bookkeepers Shouldn’t Miss This Tax Season

Bookkeepers, as trusted advisors, are very much involved at this time of year in handling, managing and closing books for the end of the year. Additionally, Bookkeepers are very much involved in people’s personal finances and preparing for the upcoming tax year. Each one of these clients are required to have their taxes filed, so it would be understandably beneficial for the bookkeeper to offer this service as well. Both bookkeepers and clients want to start a new year having everything in place. 

Why Is It Important To Be Prepared For The Tax Season

Upon every upcoming tax season, Tax Preparation and CPA firms need to be educated and gear up for an increase in new customers and clients. National Tax prepares the preparers to prepare. At this time of year, CPA firms with a potentially heavy workload, are seeking and searching for newly trained professionals in the industry. They’re going to hire you for the upcoming tax season, you’re going to get benefits and you will gain a lot of experience. Professionals might start on the lower rung of the ladder, but it’s the best time to be hired by these CPA firms. 

Why Insurance Agents and Brokers Make Good Tax Preparers

Similar to Bookkeepers, Insurance Agents and Brokers are trusted advisors that have an existing client base. This access to insurance policies and financial portfolios enables them to be familiar with their client’s finances, investments and incomes. This access provides another good potential opportunity to offer tax preparation service. They might find that their clients are just going to some untrained tax preparer, or some unreliable and unattentive group of tax preparer franchises. Alternatively, these agents are able to offer them personalized and responsible attention that will serve them best.

Why It’s Not Too Late To Enroll To A Tax Preparation Course This Time Of The Year

The duration of the National Tax Federal Income Tax course is about 150 hours and anyone can complete this in about 8 to 10 weeks. When you do the calculations and you think like a tax preparer, dealing with numbers, we estimate 150 hours. If you apply yourself for about two hours daily, then it’s very doable in eight weeks. All in all, you should approximate around 60 days or two months and you will have ample time to complete the course. 

When you invest two hours a day, a number of things can happen. First, you might need more time. You might be able to devote more time to this if your schedule allows. On the other hand, if  your schedule doesn’t allow for 2 consecutive hours, then it can be broken down to different times of the day. Perhaps a little bit in the morning or evening or whenever you have time, perhaps on the weekends. Second, it depends on how well you grasp the issues at hand. Certain areas of the tax course can be completed at a much quicker pace. Other aspects require you to pay more attention. 

Tax season officially starts on January 1st. Technically though, the IRS does not release some of the forms before January 1st. This can go well into January. Tax preparation software developers find themselves releasing and finalizing product updates well into the month. Generally, clients are not yet seeking tax preparation services, so you have more time. You have the advantage of learning and practically being involved in it while it’s happening. So when January 1st arrives, you are ready to start. By this time, you have already learned quite a lot to be able to service clients. You might not have wrapped up your training yet, but you’re becoming more aware and alert to finish it and apply what you’re learning.

Is It Recommended To Start Your Own Tax Preparer Business Rather Than Starting By Working For Others

There are obviously two options: either you start up your own tax practice or work for a CPA firm or any tax preparation firm. At National Tax, we like to encourage students to pursue independent careers and start up their own businesses. There are a lot of advantages to owning your own business; opportunities, flexibility, independence, and the potential to build a solid growing client base. However, some people find this too much of a burden, and prefer to work for others. Over all, it really depends on your personality, how ambitious you are and how you approach it. Whichever way you decide, this is the time of the year to make it happen. 

It is important to note that whichever way you decide, there is no pressure since it’s not necessary that it has to be full time. When we talk about going out on your own, you should start with your own taxes, which you’re going to need to do very shortly for yourself. Then comes family, friends, and acquaintances who will all need these services fulfilled. Since there is a personal connection, you have a much better opportunity reaching out to them as an independent tax preparer.

Summary: Looking Towards a New Year and a New Career

In this article we discussed what happens in the tax world at the end of a calendar year. At National Tax Training School, we plant seeds to encourage our students to prepare themselves for a better career, a better income, a productive future and a more fulfilled life. Learn more about our organization by visiting our website or just give us a call.

About National Tax Training School (NTTS)

National Tax Training School was founded in 1952 and over the past 60+ years has grown into the most recognized and respected distance learning institution dedicated to training its students in US federal taxation. NTTS is dedicated to providing Federal Income Tax Courses, IRS Annual Filing Education, Tax Preparation Classes, and IRS Annual Filing Season Programs.