Timing and knowing where to find the resources needed is key when managing the ever-changing
tax rules that can affect many. The simplest way to notify clients of the changes to the tax code
would be by email. Sending out a quarterly email with important dates and new tax code changes
can help clients stay up to date with tax laws. Every client has different situations that arise or big
life changes like getting married, having a child, or starting their own business. Knowing where to
find the resources is the key. Having an accountant that can provide that will help with the changes.
There are other options like mailing, calling clients, or adding it to the business website and these
are good but to maximize time email I believe would be best. There will be some clients that prefer
a certain way to connect and communicate and that should be discussed and notated.
Tax codes change all the time, some that have taken place in the past have been changes in the
individual income tax rates. Changes in the itemized deduction. The Trump tax bracket created new
income tax brackets that changed what many Americans pay in taxes. In 2022 the standard
deduction for the married joint was $25,900 and now for 2023 it has gone up to $27,700. c In the
instance of capital gain tax rate 2022 vs. 2023, an example short-term gains are taxed as ordinary
income, while long-term gains are charged at either 0%, 15%, or 20% based on filing status and
taxable income. For married filing joint the range has changed by 0% ($0-$83,350 in 2022 and $0-
$89,250 for 2023). All these changes are relevant and can affect the taxpayers. It is important people
understand the changes and where to find them. Another change is the Earn Income Credit (EIC) for
2023 will also see a bump and see an increase of $7,430 for qualifying taxpayers with 3 kids or more.
It is really important to let clients know about tax law changes that affect them so they can plan
their taxes properly. Clients should be aware of what changes apply to them so they can adjust what
they do throughout the year to match these changes. There are different ways to talk to clients
about this, like meeting in person, calling them, sending emails, or writing memos. There are rules
for tax services, but because advice should be tailored to each taxpayer's needs, there is no set way
to communicate or record advice in SSTS No. 7. Because there is no specific rule, the tax
professional needs to choose the best way to communicate based on the situation and the client.
I think that using emails is the top choice for sharing tax advice with clients. Emails give the
information in writing, so clients can read it again whenever they want. It is also easy for clients to
ask more questions quickly. Emails have a time stamp, which helps with keeping records, and they
reduce the chances of clients getting the wrong idea. Written messages also have the benefit of
creating a lasting record and might be a simpler way to explain complicated topics to clients.
A big change for this year's taxes is the adjustments made for inflation. Inflation has been a major
topic lately and it has had an impact on taxes. Because of this, they released something called
Revenue Procedure 2021-45 to let taxpayers know about these changes. While most of the changes
would affect taxpayers, one thing mentioned in this procedure is that the amount of income used to
decide how much the Lifetime Learning Credit gets reduced for couples filing taxes together is not
being changed for inflation. This might be important, but I do not think it's necessary to tell a client
about it, even if they're married and filing taxes jointly. Even though it is part of the tax change, it
should not really change how a taxpayer files their taxes or their current situation.
Reference:
NerdWallet, Orem, Tina, Parys, Sabrina, October 19th, 2022,"2023 Tax Changes: IRS Issues Inflation
Adjustments"2023 Tax Changes: IRS Issues Inflation Adjustments - NerdWallet
Sawyers, R., Gill, S. (20200127). Federal Tax Research, 12th Edition. [[VitalSource Bookshelf version]].
