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Product & Service Guide

Tech and Tax: How CPAs Need to Prepare for the Intersection in 2019

We’ve moved past the basics of cloud—it’s no longer just a buzzword—but there’s still a significant need for education. While initial adoption may have swung in the direction of public cloud, this is largely due to a lack of understanding when it ...

For CPAs, utilizing tax technology is an essential tool for day to day work. From automation of manual processes with on premise to cloud solutions, it’s no longer enough to just understand taxes, it’s necessary to also understand the technologies that can help them calculate tax more easily for clients, enabling CPAs to focus on looking at tax more strategically within their clients’ businesses.

While most CPAs have adjusted to this reality, the world of tax and tech is constantly changing—the two are becoming intertwined in new ways that will impact CPAs and their work in the year to come. What are some of the biggest changes CPAs need to prepare for in 2019? Here are a couple of places to start.

It’s the Year of the Hybrid Cloud—and Cloud Education

We’ve moved past the basics of cloud—it’s no longer just a buzzword—but there’s still a significant need for education. While initial adoption may have swung in the direction of public cloud, this is largely due to a lack of understanding when it comes to different cloud approaches. 2019 will be a year of education and businesses—and finance departments—will gain an appreciation for which options are more suitable than others for a given organization’s unique needs. Largely, this will lead to greater consideration of the options available, driven by a need to meet business requirements, a desire to control costs and an increased focus on cybersecurity.

The takeaway for CPAs? Understanding different deployment approaches and options, as well the ability to help companies navigate the right tax technology and environment will be invaluable. Don’t assume a one-size-fits-all solution is right for every organization. Tax solutions that offer clients the ability to solve problems with deployment options of on premise, public and private cloud are ideal, providing the freedom to adjust tax technology approaches as necessary.

Real-Time Tax Expectations Become Reality

Whether it’s the need for accurate tax calculations on mobile devices or increased interest from governments in digital invoicing and real time taxation, technology is changing tax expectations. Consumers and governments alike expect to reap the benefits of tax calculations and returns occurring as purchases happen.

On the consumer side, tax calculation has gone from a back to a front office priority. Consumers want tax calculated accurately on the spot. Online shoppers expect to see the complete value of their shopping cart as soon as they enter the shipping destination. Purchases made on an iPhone or delivery orders made from apps need to calculate accurate tax.

When it comes to governments, the value of real-time taxation becomes even more clear, with the potential to close gaps in tax revenue. There’s no need for governments to wait for tax returns. In fact, there’s no need for a delay at all when taxes can be immediately and accurately calculated. Whether this year or next, real-time taxation is a reality for which companies and CPAs need to prepare.

In both scenarios, CPAs and the businesses they support can prepare themselves for new expectations and upcoming changes by investing in tax technology that can accurately calculate tax real time rather than rely in rate tables and manual upkeep

The Digital World is Changing What’s Taxable

2018 saw momentous discussion and change when it comes to what’s taxable in the digital world. Whether customers are tech companies or small businesses that sell to customers across the country online, taxes are changing.

The South Dakota v. Wayfair decision will have a greater impact moving into 2019. Allowing companies to impose tax on out of state buyers, many states have begun enacting tax changes that will alter requirements for online sellers. These updates complicate tax as smaller companies need to keep closer track of where their online customers are from and the changes in tax rules within those states.

While the actual tax impact on your clients’ businesses will vary, tax technologies can help make these inevitable changes less daunting. Wayfair-related taxes go beyond just a small percent change in an already established tax. Yet with the right technology in place, the impact will be minimal, so CPAs and their clients can continue to focus on their business and finance goals.

There’s no separating the worlds of tech and tax. In today’s digital landscape, they both impact each other in concrete and intertwined ways. While technology can add complexity, it can also make tax manageable.

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Chris Livingston is Director of Operations and Product at Vertex Inc.