The biggest beneficiary of the new tax changes just might be the accountants

(This post originally appeared on The Washington Post)

Remember when President Trump promised that we’d be doing our tax returns on the back of a post card? Well, that doesn’t seem to be happening anytime soon. And that’s great news for one industry. My industry. Accountants. I’m a Certified Public Accountant and, according to a recent report, it looks like this year’s going to be a banner year.

At least, that’s according to the ranking Democrat on the Senate Finance Committee, Ron Wyden (D-Ore.), who has issued a new report about how the tax legislation passed at the end of 2017 will affect small businesses. Admittedly, the report is just a wee bit partisan (hint: the title is “Tax Code and Small Business: Even More Bizarre and More Unfair than Before”). But his conclusions are understandable. His report says that the new law is causing more uncertainty among small businesses, and that’s forcing them to rely more heavily on their accountants.

“What good is a deduction if money spent in annual fees to your accountant far exceeds the tax break?” Wyden said, according to this Accounting Today report. Main Street job creators will be lucky if they figure out how to calculate their deduction any time soon.”

Wyden is talking about the new deduction for pass-through entities like partnership and those filing S-Corporation tax returns. The rule will allow some of these small businesses — assuming they qualify — to deduct up to 20 percent of their income. That’s certainly a good thing for many.

But figuring out how the rule will apply is not an exercise for a layman. The text explaining this deduction spans a full nine pages and cross-references more than 20 other sections of the tax code. Some professional firms and those making amounts over a certain level may find themselves unable to take full or any advantage of this benefit. Certified Public Accountants like me are still working our way through the rules and even the American Institute of Certified Public Accountants is begging for “immediate guidance.”

The issue is important and affects many small businesses. According to data from the think tank Brookings Institution, of the 26 million businesses in the United States, 95 percent are pass-through entities and approximately 99 percent of those businesses have less than 10 million in annual sales.