The accounting industry has been constantly and rapidly evolving over the years. As the industry evolves, there are numerous changes and uncertainties that are experienced. These changes and uncertainties bring about challenges that organizations have to cope with. One major challenge is the ever-changing tax reforms, which affect everything in the organization from expenses to depreciation. The best solution to coping with the changing tax reforms is having up to date accounting software to implement the tax rates and deductions.
Tax reforms are a major challenge in the accounting industry. These reforms shape how taxes are administered to organizations and therefore affect every operation of the organization. Organizations should always be up-to-date with tax reforms to ensure compliance. An example of tax reforms is the Tax Cuts and Jobs Act. This tax reform affect organizations in different ways. Based on this reform, organizations' entertainment expenses are not deductible, although meals related to the organization are. Also, it affects bonus depreciation, whereby the organization is allowed to deduct 100% of depreciation on the organization's assets (Honaker & Thomas, 2020). Besides this reform, other numerous tax reforms may affect how the accounting department in organizations work. Therefore, organizations should always be up-to-date with tax reforms for compliance.
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The solution to tax reforms is always having updated accounting software. Updated accounting software can help accountants when it comes to implementing new tax rates and deductions. Updated accounting software can help organizations avoid violating tax compliance as the manufacturers constantly update them to the latest tax rates and deductions. Therefore, every organization's accounting department should ensure that they have the best and up-to-date accounting software to make it easy to implement any tax reforms.
In a nutshell, the constant changes in the accounting industry bring different challenges, such as tax reforms. Tax reforms affect how organizations operate, especially how they implement tax rates and deductions. Failure to implement tax rates and deductions could result in tan non-compliance for the organization. Therefore, organizations need to ensure that the accounting departments have the latest accounting software to implement any changes in tax reforms.
Reference
Honaker, K. & Thomas, P. (2020, February). ICYMI: Analysis of the Initial Financial Statement Impact of the Tax Cuts and Jobs Act. The CPA Journal. https://www.cpajournal.com/2020/02/27/icymi-analysis-of-the-initial-financial-statement-impact-of-the-tax-cuts-and-jobs-act/
