If you’re a business owner like myself, you’re probably ready to ring in a new year, moving on from the lingering effects of the COVID-19 pandemic. But before that happens, make sure your business is ready for 2022. This includes preparing for sweeping tax changes, which most likely will take effect starting January 1, 2022.
Let’s take a moment and think how the past 24 months has affected your business, and what you need to consider in 2022. Considering the first major federal tax hike in nearly 30 years is about to take place, how trusted is your relationship with your CPA?
Looking back, you probably felt the kitchen sink being thrown at you. Amidst the impacts from the COVID-19 pandemic and social unrest throughout America, businesses faced unexpected and unprecedented challenges. Despite some economic recovery this year, you probably had to make some tough decisions impacting your employees and your company. Hopefully, you had a team of trusted advisors to steer your decision making. Was your CPA at the table, in these discussions?
In a recent Thomson Reuters survey, hundreds of CPAs and accountants surveyed reported an increase in client businesses turning to them for business advice during the Pandemic. But unfortunately for them, most of the CPAs surveyed said they lacked confidence in giving any advice outside of tax information. Was your CPA firm there for you, when you needed it most?
When the Pandemic first halted businesses in March 2020, my CPA firm, PIASCIK, received floods of calls from clients all over the U.S. needing advice on navigating the just-announced Paycheck Protection Program. At a time when many CPA firms were not returning clients’ phone calls, my team was already prepared and jumped in head-first to guide them on critical business decisions. We made sure our clients were first in line with submitting PPP applications, even before the banks had opened their portals, guaranteeing that they received financial relief when they needed it most.
Tony Pericle, founder and CEO of ProfitOptics, recently cited numerous advantages that his company – a global software developer – has benefited from by engaging us in tax-efficient business advice. Pericle recalls that day in March 2020, driving to his office, when he picked up the phone to call us. “Steve Piascik helped us navigate through a very challenging time that many businesses were facing. He brought opportunities to us and offered to help manage all the details. His insights also helped us make some difficult decisions related to the direction of our firm and we would be several steps behind without him as a strategic partner.”
At the same time as Tony Pericle was calling us, my firm mobilized and connected with every client being impacted by the pandemic. Last year, we connected numerous clients with the Employee Retention Tax Credit (ERTC), a tax-saving strategy. Client Paul Boulden had never even heard of the ERTC until we brought it to him, and now he’s expecting his engineering firm – Appendix R Solutions — to benefit from a tax savings of $80,000 this year.
“If you think you can save money by doing your taxes internally, versus paying a trusted CPA firm with a strong track record, which is PIASCIK, you’ll miss the added value of things like the ERTC that came out of left field,” notes Boulden. “Every year, I can see that PIASCIK has come through with new added value. They’ve made our business become more successful.”
Can you say this about your own CPA?
If the pandemic was not enough for engaging a trusted CPA, brace yourself for 2022. Sweeping tax hikes – the largest in nearly 30 years – are expected to pass through Congress. This massive tax legislation is guaranteed to hit every individual making more than $400,000 annually and every company in America. The hikes will be felt in investments and capital gains, 401(k) plans, and other areas of the economy. Is your business ready?
Twenty years ago, when I founded PIASCIK, I made sure we included a Routine Tax Consulting policy offering every client the opportunity for client advisory services in their engagement with us. This policy, where instead of billing high hourly rates we approach our client engagements with a flat-fee, has proven invaluable to clients all over the world, who know they can call us for advice at any time, and not receive a bill for this.
Our clients hear from us throughout the year on business and tax matters, not just during tax season. In fact, we check in with them once a quarter not only to review financials, but to brainstorm opportunities for business growth and solutions for profitability across all areas of a client’s company. With tax hikes looming and most likely taking effect in 2022, CEOs and business owners are facing a myriad of decisions to make before year-end. Not only will they see individual and corporate tax rates go up, but the tax increases will be seen across investments and capital gains. We’re helping clients to make these critical decisions, now in 2021, which ultimately will reduce their tax liabilities in the years ahead.
“Standing in the middle of the forest, it’s often hard to see beyond the trees,” notes Kevin Reardon, co-owner of Franco’s Fine Clothier, a family-owned retailer. “PIASCIK looks from the outside in. They’ve helped us continue to grow by providing us with another set of eyes looking at the business.”
Despite the uncertainty of how far the tax increases will factor, one thing’s for certain. Businesses need to position themselves now for changes in the tax code that will take effect January 1. Is your business prepared? The past 12-24 months most likely have challenged your business models. Bracing for what’s in store for 2022, it’s probably time to seek out a trusted business advisor, who can look out for your best tax interests, before it’s too late.
