The Impact of Tax Law Changes on the Accounting Profession

by Lewis Ogden | Last Updated: March 14, 2024 | Accounting
tax law changes

Tax laws keep updating, and they affect everyone differently. We’re here to help you understand them, especially the ones involving businesses in San Diego. From the general overview of the latest tax law changes to what tech you should use to make your job easier, we’ve got you covered. So, let’s get started!

Overview of Recent Tax Law Changes

Some of the recent tax changes are due to inflation adjustments from the previous year, while others introduce entirely new rules.

The SECURE 2.0 Act is enhancing retirement savings with significant modifications. Now, it includes more lenient rules for early withdrawals from retirement accounts. There’s also the opportunity to roll over 529 education account funds into a Roth IRA.

Additionally, Roth 401(k) plans are now exempt from required minimum distributions, aligning them with Roth IRA policies.

The maximum contributions to 401(k)s, IRAs, and other retirement plans have increased, offering more opportunities for tax-advantaged savings. The income limits for Roth IRA contributions have risen, making it possible for more people to take advantage of this retirement-saving strategy.

Tax credits and deductions have also seen adjustments. Notably, the federal EV tax credit system has been revised to immediately benefit buyers of eligible electric vehicles. The adoption tax credit and standard deduction amounts have been increased to account for inflation.

These updates highlight why it’s smart to plan your taxes ahead of time. By keeping track, you can make choices that might save you money and improve your business’s finances.

Adapting to New Tax Compliance Requirements

new tax deadline 2023-2024

This year, due to significant winter storms in California, the IRS has extended the tax filing and payment deadlines for San Diego County residents. This is a way to offer some relief to those affected.

This extension is particularly important for accounting professionals and small business owners, as it provides them additional time to manage their finances. Now, they have until June 17 to file their 2023 tax returns and make any necessary payments.

Financial advisors recommend filing as early as possible for those expecting refunds. This should be done regardless of the extended deadline to expedite the refund process.

The extended deadline includes individual income taxes, 2024 estimated tax payments, contributions to IRAs, health savings accounts for 2023, and various business tax returns normally due in the early months of the year.

If you receive a late filing notice or encounter any issues related to the storm’s impact, the IRS encourages you to contact them directly for assistance.

Impact on Small Businesses: What to Do Next?

Being aware and prepared is key to dealing with these changes. Start by joining local business groups or online forums. Other business owners can share their experiences and tips, which might help you, too.

Staying informed is another big part. The IRS website is a great place to find the latest tax news and updates. They have guides and resources just for small businesses.

Consider signing up for newsletters from reputable accounting firms or business organizations. They often send out updates on tax laws that could affect your business.

Remember, the goal is to use these tax changes to your advantage. With the right information, you can make smart decisions that benefit you. If you can’t track all these changes and need help, consider hiring a San Diego accounting firm to assist you with planning and preparation.

The Role of Technology in Navigating Tax Changes

tax software

Technology plays a big role in dealing with tax changes. With new tax laws coming into play, using tech can make things a lot easier.

First, tax software is your best friend. It gets updated with the latest tax laws, so you don’t have to worry about missing out on new rules or deductions. This software can also spot mistakes and help you file your taxes correctly.

Second, accounting apps. These are great for keeping track of your expenses and income all year long. QuickBooks Online, FreshBooks, Zoho Books, and Xero are just some of the various apps you can choose from.

When tax season comes, you already have all your information in one place. This makes it simpler to see what you owe or what you can deduct.

Third, online resources. As we’ve already mentioned, the IRS website is always a good place to start. Plus, many professionals offer webinars or online courses about new tax laws.

Lastly, cloud storage. Keeping your financial records safe and accessible is super important. Cloud storage lets you back up your documents online. This way, you can access them anytime, which is handy when you’re gathering info for taxes.

And there you have it! We hope this guide has helped you understand how to better prepare yourself. Remember, staying informed is key. Make use of all the resources at your disposal, and we’re sure that you’ll navigate through taxes with ease. Wishing you all the best with your business!