Four new hires at RKL LLP are designed to help the firm keep pace with the increasingly complicated tax needs of businesses, especially as they grapple with the nuances of recent tax changes.
They are Carrie J. Booth, Michael Eby, Leonard P. Metkowski and Johnathon W. Heller, all of whom have joined the firm’s tax services group. RKL LLP is an accounting and business consulting firm with offices around the region.
Booth and Heller, who joined as managers, will work in the Reading and York markets. Eby and Metkowski, named as partners in the firm, will cover the Harrisburg and Philadelphia regions.
“It couldn’t come at a more important time, as recent economic forces like tax reform, generational ownership changes and a dynamic mergers and acquisitions environment are generating significant demand from our clients throughout the region,” said Ed Monborne, CEO of RKL.
Accounting challenges ahead
Eby said the new tax laws, adopted nearly a year ago, continue to prove challenging for tax professionals.
“These are the biggest changes in 30 years,” Eby said.
He said a CPA’s top challenges going into 2019 are:
- Delayed education about the impact of the new laws.
- To incorporate or not to incorporate. “The biggest winners in the new tax law were C corporations. Will everyone now decide they have to become a C corp?” and is that the best choice for their business, Eby said.
- Understanding the new 20 percent deduction for pass-through businesses and its impact. “It was intended to make it fair for partnerships and S corps, but it is very, very complicated,” Eby said.
- Anticipated technical corrections that may be released. Eby said accounting firms need high-level personnel to understand the old tax law in order to understand the new tax laws.
- Where are the new tax return forms? “The IRS is already saying the forms won’t be ready until the end of February. It could be into March this year, and that could create huge problems,” Eby said.
Not only would a delay in new filing forms create stress for tax professionals, it may also stress the tax-season crunch time for accountants.
Eby said no one is talking about a blanket filing extension beyond the traditional April 15. “It’s never been done before and would set precedent,” Eby said. Taxpayers may file for extensions on an individual basis.
“With late forms and questions about preparation, it’ll be hard on individuals, partners and S corporations,” he said.
He projected a two-year learning curve for filers and tax professionals, after which time there should be fewer surprises.
But how long the “new normal” takes to settle in will be anyone’s guess.
“As loopholes develop there may need to be revisions … you can’t anticipate everything,” Eby said.