This tax season could be the calm before the storm.
There aren’t a lot of changes in this year’s federal income tax filing. One significant change is that the filing deadline has been moved to April 18 because Emancipation Day, a holiday in Washington, D.C., falls on Monday, April 17.
But Randall S. Kuvin, managing partner of Flagel Huber Flagel, one of Dayton’s largest locally based accounting firms, says the talk in Washington of major changes in the tax code, possibly later this year, means things could get more complex down the road.
“We’re getting a lot of questions in anticipation of changes with the new president and Congress and their intentions,’’ he says. “There’s a likelihood of some significant tax reform later in the year.”
Flagel Huber Flagel, which has business and individual tax clients from Northern Kentucky to Columbus, isn’t advising clients to do anything differently now in anticipation of possible changes.
“The best thing is to be looking out for what’s coming and be prepared to act quickly because significant changes like that aren’t typically done retroactively,” he says.
One possibly seismic change for small business would be cutting corporate tax rates. For years many small business have elected “S” corporation status, which allows income to be passed through untaxed to the business owners who are taxed at a lower personal income rate. But a significant reduction in corporate taxes could lessen the value of electing “S” corporation status and prompt more businesses to file as traditional “C” corporations, he says.
One other issue to be aware of, Kuvin says, is that the full penalties are in effect for not complying with the Affordable Care Act.
“Those penalties are more than double what they were for 2015,” he says. That’s almost $700 for an adult and more than $2,000 for a family without health insurance.
This time of year involves a lot of long days for the 60-person staff of Flagel Huber Flagel, a full-service accounting and business advisory firm, because tax work typically represents about 40 percent of the firm’s business. It also has expertise in the areas of business valuations, litigation support and forensic accounting. Flagel Huber Flagel has roughly three dozen CPAs. It is also a member of the BDO Alliance, an association of more than 170 independently owned local and regional accounting firms, which extends the expertise available to clients.
One of the ways Flagel Huber Flagel tries to differentiate itself from other firms is by “going the extra mile” for clients and in community service, Kuvin says.
For example, companywide community service effort called Accountants in the Community involves Flagel staff members stepping out from behind their desks for a week to form teams that volunteer at community-service projects.
It is not only a way to give back to the community but also helps build team spirit within the firm, Kuvin says.
Founded by Dave Flagel in the midst of the Great Depression, the firm will mark its 85th anniversary next year. Anniversary celebration plans aren’t set, but Kuvin says, “We’re starting to think about it.”
To receive more articles from Dayton Magazine sign-up for a complimentary subscription here: http://bit.ly/1l70sqL