New Cost Basis Reporting Tools Could Boost Tax Professionals' Income By $450 million by 2015, says article in December 2012 CPA Journal
PHOENIX, Dec. 6, 2012 /PRNewswire/ -- The trend toward individuals managing their own investments and taxes appears ready to reverse course, and the change could put an additional $450 million in the pockets of tax professionals by 2015, according to an article in the December 2012 issue of The CPA Journal.
The growing opportunity for professional tax preparers is being driven by a new law on cost basis reporting and the supporting forms required by the IRS. The tax software industry has ridden to the rescue, putting sophisticated new technology into the hands of tax professionals that enables them to accurately determine the cost basis of a client's stocks in a matter of minutes. During the 2011 tax year, many clients turned to their brokers for the information, but most brokers struggled to provide the data in a timely manner – if at all.
With the new software tools at their disposal, tax professionals are now well equipped to go after the 75% of U.S. investor households that international research and advisory firm Celent says do their taxes without the help of a pro. As the cost basis reporting requirements are phased in during the next three years, Celent estimates that as many as one-third of the untapped households could become new clients of tax professionals. That would translate into $450 million in additional revenue.
Given that not all cost basis software is created equal, the article, written by NetWorth Services of Phoenix, encourages tax professionals to be discriminating in their choice, making certain their selection offers:
- The flexibility to cover all possible transactions for a security
- The ability to reconcile a Form 1099-B with Form 8949 and even export it directly into a Schedule D, and
- The capability to cover securities historically
To further counter individuals' do-it-yourself mentality, tax professionals are further advised to go the extra mile for clients, by providing not only tax services, but serving in the capacity of a tax advisor and/or financial planner.
For media inquiries, please contact Barry Cohen at Networth Services at (602) 476-5484.
SOURCE NetWorth Services