There’s no question about it: Kim Bey is busy.
Bey, who owns a tax firm in downtown Washington, says tax-related business has more than doubled so far this year, thanks to a wave of new tax laws that took effect in early January.
“Has it been busy? Oh yes, big time,” Bey said. “I’ve never had so many people coming in asking for help.”
On January 2, payroll tax rates for most Americans went up as part of the “fiscal cliff” deal that President Obama signed into law.
Those changes, coupled with the fact that the IRS did not begin accepting tax returns until Jan. 30, means that area accountants have been scrambling to file a higher-than-usual load of tax returns by the April 15 deadline.
“I am absolutely buried at the moment,” said Jay Reiner, a certified public accountant in Arlington. “I’m just going to have to forego sleep for the next couple of weeks.”
Nearly half of all Americans are planning to hire an accountant to prepare their tax returns this year, according to data from Accounting Principals, a Jacksonville-based recruitment firm. (The firm does not have comparable data from prior years.)
Worries about an upcoming furlough and government instability have also meant that clients — particularly those who own businesses — are asking for more help planning for the future.
“People are coming in and saying, ‘I want my taxes done but I also want to plan for next year,’” said Bey, adding that she has hundreds of more clients this year than last year. “People are more proactive this year. They want to know what to expect in 2013 so they can plan equipment purchases, personnel changes, expansions, things like that.”
It’s not just business owners, though. Many area accountants say the number of first-time individual clients appears to be on the rise, a reflection perhaps of the improving economy.
“They’re saying, ‘OK, I got married last year,’ or ‘I started a business,’ or ‘I bought a new property,’ and this is getting to be too cumbersome for me to deal with by myself,” Reiner said.
He added that social media is also playing a role.
“I’ve got way more new clients than I did last year, and a lot of new clients who say they found me on Yelp,” Reiner said, adding that in the past, most of his clients came from word-of-mouth referrals.
On the flip side, accountants say higher taxes mean that clients seem to be more conscious of the payments they’re shelling out.
“This year everybody is trying to negotiate [accounting] fees,” said Rajiv Mahajan, a partner at Shalini Gupta & Associates in Columbia. “We’ve noticed that people are shopping around more, which isn’t something that happened in the past.”
Overall revenue is up about 10 percent compared with the first three months of last year, Mahajan said.
But even with climbing demand and rising profits, local accountants say they’re not sure exactly how the rest of the year will pan out.
“Now what I’m working on is: How do I keep this momentum going for the rest of the year, once we’re out of tax season?” Reiner said.
But before he puts the lid on tax season, there is one last thing Reiner has to do: File his own taxes.
“I’ll probably do them the day before they’re due,” he said. “I’ve got to take care of my clients first.”