Q&A With a Tax Pro: Preparing for Tax Season

Meet Jon Bickerton, CPA, a senior manager with BeachFleischman PC in Tucson, Ariz. Jon provides accounting and tax services, from assisting accounting personnel with year-end adjustments to preparing tax returns. His specialty areas include research and development tax credits; nonprofit, corporate and partnership taxation; and cost segregation services.

I sat down with Jon to learn more about how he helps his clients, and the firm, prepare for tax season. Here’s what he had to say.

Scott Cytron: Tell me three ways you’re getting your clients ready for tax season 2015.

Jon Bickerton: I’m keeping them apprised of pertinent tax law changes or significant bills that have gained traction in Congress, reminding them of year-end tax savings opportunities, and performing year-end tax projections and planning.

SC: What are you doing to educate your clients about the Affordable Care Act?

JB: We’re working with individuals and businesses on the ACA – and the needs are somewhat different. On the corporate side, in addition to assessing susceptibility to ACA on a case-by-case basis, we’re sending out literature, specifically on reporting requirements relating to the 1095-series of information returns that are required to be filed beginning with the 2015 tax year. For individuals, we send out letters stating, in plain language, the requirements of the individual mandate and specifics on MEC (minimum essential coverage) and who must be covered.

SC: What is the one mistake you see over and over again when it’s time to prepare your clients’ taxes?

JB: Not advising your CPA/tax preparer of significant transactions before they occur. Too often, we learn of big transactions after the fact when it’s too late to do anything about them – and nine times out of 10, information could have been structured much differently for dramatic tax savings.

SC: What is the strangest or oddest deduction you’ve seen a client want to make?

JB: I haven’t seen anything too weird, just lots of misconceptions about what’s deductible. Clients want to deduct lots of things that aren’t deductible, including vet bills, energy efficient pool heaters, political donations, donations to people instead of charitable organizations and donations to nonprofits that aren’t charities. Some want to write off private school tuition; there’s a tax credit for donations to certain support organizations, but no deduction for your kid’s tuition. Finally, some businesses that give away gift cards want to write off the value of the card.

SC: You work with non-profits; what’s you advice to other tax professionals on how they can go about adding non-profit as a niche industry?

JB: Non-profits are a completely different animal. Their pain points and areas of exposure are totally different than for-profit businesses. You need to become intimately familiar with their concerns so that you can demonstrate real value. It’s incredibly difficult to be profitable with non-profits because they are much more fee conscious than for-profits – unless you show that you’re worth it.

When you communicate risks and exposures that a nonprofit was either unaware of or inadequately aware, and show your value as an advisor to mitigate and minimize these risks, you can build a successful practice. Most tax advisors are not literate in these matters, so the more you understand issues such as involvement in politics/lobbying, excess benefit transactions and functional expense allocations, the more valuable you can prove to be to a non-profit that needs your skills.

SC: What is your advice to older tax professionals on how they can recruit younger talent into their firms?

JB: You’ve got to be willing to invest your time in training raw talent. Most smaller firms are looking for someone with lots of experience who can begin earning them revenue right away. However, these people are almost impossible to find. If you want to build your firm, you’re going to need to take a loss on young folks in the short term in order to get long-term gains. Take on interns; that’s a terrific way of evaluating talent, personality and commitment before you invest significant money in them.