How to navigate the upcoming tax season

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Every tax season is unique. It seems as though every year has a few new tax rules or technologies to navigate, but 2020 will likely go down in the record books due to its changing tax deadlines, new rules, loans, and stimulus payments. And if those challenges weren’t enough, companies were navigating all of it with a record number of employees working from home. What should we expect as we approach this new tax season? Here are some trends we’re seeing. Tax changes will make for an interesting filing season A few years ago, tax reform made sweeping changes to the U.S. income tax code, impacting virtually every business and individual and complicating the filing season as taxpayers and professionals adjusted to the new rates and rules. Expect the 2021 filing season to be similar. Pandemic relief legislation passed in 2020 will significantly impact income and payroll tax filings for companies in the coming year. Employers will need to navigate new retention credits, forgiveness on Paycheck Protection Program loans, and delays in payment of Social Security taxes. Many employees are now working virtually and could be residents of a different state than their employers, which can impact the company’s state income taxes, withholding, and unemployment insurance. Staying on top of these changes and preparing for their impact on 2020 tax filings is crucial. Flexible and remote work will continue The pandemic forced companies to switch to remote working virtually overnight. Although the migration went reasonably well, it will likely go on longer than many companies initially predicted. According to a survey from Willis Towers Watson, employers expect 19% of their workforce to continue working from home full-time post-COVID. That’s roughly half the percentage working from home in July 2020 (44%), but almost three times 2019’s figure (7%). Companies have figured out the tools and technology to make remote work successful in a structural way. However, many still need to adapt leadership styles to this new way of working. Employers also need to focus on employees’ well-being as workers continue to deal with blurred boundaries between work and home, juggling work with childcare and homeschooling, stress, and burnout. Technology Read More »

The post How to navigate the upcoming tax season appeared first on Accounting Principals Blog.

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