Because the expiration of key Tax Cuts and Jobs Act provisions looms, tax professionals are getting ready for what may very well be one other interval of upheaval.
In 2017, when the TCJA was first enacted, tax departments struggled to maintain tempo with new rules and steering. In keeping with our
The approaching 12 months may convey extra of the identical. Eight in 10 respondents are reasonably or very involved in regards to the potential impression of those modifications. But many depend on outdated, handbook processes that make adjusting shortly to main legislative modifications tough.
With the good thing about hindsight, tax professionals have a novel alternative to use the teachings of 2017 and put money into automation now to keep away from repeating the identical pricey errors.
Handbook processes nonetheless dominate tax departments
Some of the hanging findings from our survey is that many tax professionals proceed to depend on handbook workflows regardless of the rising complexity of tax compliance. Seventy-six p.c of respondents mentioned they nonetheless use Excel for tax calculations, and 63% manually collect knowledge from enterprise threat administration and common ledger programs to carry out tax calculations.
These outdated processes create inefficiencies and make it tougher for tax groups to reply shortly to legislative modifications.
In its time, the TCJA was probably the most sweeping tax code overhaul in a long time. It required tax departments to considerably modify and even exchange their workpapers to mirror the modifications.
Whereas 62% of survey respondents consider they’ll replace their current workpapers with out main issue, one in 4 anticipate vital challenges, and 10% might want to create solely new workpapers.
This handbook burden may put corporations at an obstacle when deadlines are tight and compliance necessities shift quickly.
State of affairs modeling is difficult but vital
When huge modifications are on the horizon, working a number of tax planning eventualities helps organizations make selections and handle threat. Automated tax options streamline this course of by permitting tax groups to judge completely different legislative outcomes and give you methods to deal with them.
Corporations that lack automation of their tax workflows might have a tricky time maintaining with the tempo of change — particularly if Congress waits till the eleventh hour to move laws, as was the case in 2017.
Eighty-eight p.c of respondents reported it’s reasonably or very tough to conduct state of affairs modeling for TCJA modifications, and solely half have began the method. One respondent famous, “We want as a lot lead time as potential to make modifications to our fashions, and vital modifications take much more time to include. Operating a number of eventualities is a really handbook and tough course of.”
Quantifying the price of inaction
Failing to put money into automation earlier than a considerable tax regulation change is usually a pricey mistake.
Amongst respondents, 71% who skilled the enactment of TCJA in 2017 reported wishing that they had invested earlier in tax know-how to raised handle the complexity of compliance updates. Handbook processes not solely gradual response occasions but in addition drive prices, as practically 40% of respondents anticipate a $100,000 or greater improve in consulting budgets if vital TCJA-related modifications happen.
By leveraging tax automation instruments and centralized tax-focused software program, corporations can optimize how they have interaction with exterior consultants. Automation permits tax departments to take possession of routine processes, reminiscent of calculations and compliance changes, lowering reliance on consultants for these duties. As a substitute, consultants could be utilized extra successfully on high-impact tasks that drive strategic worth, reminiscent of tax planning, threat administration or navigating complicated regulatory modifications. This shift permits corporations to streamline compliance whereas making certain exterior experience is directed towards creating lasting organizational advantages.
Preparation now means higher confidence going into 2026
The info is obvious: corporations investing in automation as we speak will probably be higher positioned to deal with the upcoming tax modifications confidently. Here is find out how to get forward:
- Combine tax know-how. Substitute handbook calculations in Excel with automated tax workpapers that combine with supply knowledge and automate knowledge gathering and calculation processes.
- Undertake state of affairs modeling instruments. Spend money on software program that enables for real-time legislative modeling so you possibly can analyze a number of potential outcomes earlier than modifications take impact.
- Cut back reliance on exterior consultants. Implement in-house tax software program to maintain management over your knowledge, scale back consulting budgets and reply shortly to regulatory shifts.
With lower than a 12 months till TCJA provisions are set to run out, the time to behave is now. Taking proactive steps to automate and modernize your workflows will put you in a far stronger place than firms that wait till the final minute.
Main tax regulation modifications could be disruptive, however with the fitting know-how, you do not have to relive the turmoil of 2017. Embrace tax-focused automation to stay agile, environment friendly and able to navigate no matter modifications come subsequent.
