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Tax season 2023 Transforming Challenges into Opportunities

The 2022 tax season witnessed key resumptions in the professional landscape, including return-to-office and an in-person meeting with clients.

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Tax season 2023 Transforming Challenges into Opportunities

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  1. B U I L D I N G T R U S T T H R O U G H E X C E L L E N C E TAX SEASON 2023 TRANSFORMING CHALLENGES INTO OPPORTUNITIES

  2. MEET THE LEADERSHIP Nikhil Mahajan Founder and CEO CFE, CSOE, IRS Certified Tax Preparer Richard Freiberg Financial Services Professional CPA, Strategic Expert 0 1 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  3. Table of Contents 01. CONTENTS Introduction 02. Challenges Faced 03. Turning frustrations into fortune 04. Drive growth through outsourcing 05. Maximize profits with NSKT 06. Contact Us 0 1 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  4. INTRODUCTION The 2022 tax season witnessed key resumptions in the professional landscape, including return-to-office and an in-person meeting with clients. While several CPAs and accounting firms struggled with technology adoption to optimize internal processes, a few adjusted to the demands by outsourcing (traditional compliance driven activities like bookkeeping, financials, and tax activities). As the disruptive forces continue to bring potential obstacles for the upcoming 2023 tax season, we expect more twists and turns for tax professionals and accounting firms to calibrate with changing tax policies, handling client rush and optimizing staffing efforts. 0 2 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  5. KEY CHALLENGES This section highlights the 3 key issues that are faced by the professionals and firms for this upcoming 2023 tax season #1 Crushed Bandwidth The challenge with bandwidth and staffing shortage has been a long-standing one. This problem has been further exacerbated by the increased demand for accounting services and the increased number of clients that CPAs and firms' must service. The talent shortage results from several factors, including the retirement of experienced accountants, the difficulty of attracting and retaining qualified professionals, and the need for up-skill opportunities for the new staff. As such many firms need help to provide adequate levels of service to their clients. The impact of this challenge can be seen in several ways: CPAs and accounting firms report an increase in client complaints and refund requests. There has been a significant decline in the quality of work performed by CPAs and accounting firms, as evidenced by increased errors and omissions in insurance claims. Many CPAs and accounting firms need help to meet their revenue targets due to the increased costs associated with providing adequate levels of service, lack of expert staff and slower turnaround time. " There has been significant decline in the quality of services provided by CPA firms 0 3 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  6. #2 Delayed Technology Adoption The challenge of technology adoption for CPAs and accounting firms is significant and ongoing. The profession needs to be more proficient in adopting new technologies, and this resistance has often been justified by the need to maintain the accuracy and integrity of financial data. However, the last tax season saw a growing recognition that accounting firms must embrace new technologies to remain competitive. While many firms have already invested significantly in new technologies, getting critical staff members on board with these tools remains the challenge. In many cases, older staff members are resistant to change and uncomfortable using the new software applications. This has created a significant barrier to adoption, as staff members have resist using new tools as they feel they need more confidence. Another critical problem with technology adoption is the need to keep up with the latest technological changes. As new tools and applications are constantly being developed, it can take time for CPAs and accounting firms to keep up with the latest trends. Tax professionals MUST be proactive in their approach to technology adoption, always looking for ways to improve its' use. #3 Efficiency and Accuracy As the tax code evolves, CPAs and accounting firms face an ever-increasing challenge in keeping up with the latest changes to match the efficiency of services provided to the client. While many resources are available to help professionals keep up to date on the latest tax law changes, the sheer volume of information can be overwhelming. In addition, the tax code is constantly changing, which makes it challenging to know which changes will impact clients and how best to advise them. There have been several significant changes that CPAs and accounting firms need to be aware of. First, the standard deduction is set to increase for individual and married taxpayers. This change will impact how many taxpayers itemize their deductions and could significantly affect tax planning strategies. In addition, several new deduction and credit opportunities are available, including a credit for employer-paid family and medical leave and a deduction for certain qualified business income. With so many changes on the horizon, it's more important than ever for CPAs and accounting firms to stay up-to-date on the latest developments in tax law to maintain improved efficiency through the tax season 0 4 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  7. TURN FRUSTRATIONS TO FORTUNE The COVID-19 pandemic has been an unprecedented global event that has left many businesses and industries struggling. However, there is a silver lining for CPAs and accounting firms. The challenges of the past taxation season have created opportunities to grow and thrive in the foreseeable future. The rise of the gig economy: The pandemic has highlighted the importance of financial planning and management for startups and individuals. More prospects realize the need to invest in professional accounting services to ensure their long- term success. Authority brings breakthrough: The uncertainty in economic conditions has made many businesses risk-averse. They are less likely to take chances on new projects or ventures, preferring to work with established firms with a proven track record. This provides an excellent opportunity for experienced CPAs and accounting firms to expand their client base by offering additional services to more conservative prospects. Technology leads to retention: Technology can help CPAs and accounting firms to optimize productivity by reducing the burden on task-oriented processes. The dynamic accounting software and technology tools bridge the gap for much- needed skill sets to transition from traditional accountants to business advisors with an increased ability to analyze statistical values. Technology can help gain efficiency and manage data effectively to increase the client base, reduce costs and improve collaboration. Transition to Advisory: The pandemic has forced many businesses to reevaluate their priorities and focus on areas that will help them survive in the long term. This includes investing in advisory services, and digital transformation initiatives and seeking forward-looking insights that will make them more agile and responsive to changes in the market. CPAs and accounting firms can play a crucial role in helping their clients by transforming traditional transactional relationships into advisory discussions to implement these changes successfully. This is the most significant factor that will transform YOUR firm, attract, and retain key staff, and become more profitable and satisfied. 0 5 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  8. DRIVING GROWTH THROUGH OUTSOURCING Strategic partnerships can create opportunities for CPAs and accounting firms to maximize growth through outsourcing services. The post- covid growth of organizations employing outsourced services proves that outsourcing service providers have maintained high-quality standards and significantly reduced manual errors through practical technology tools and skill sets. By partnering with an experienced outsourcing provider, you can tap into a wider pool of talent and expertise, as well as access the latest technologies and processes to derive the following key benefits to scale your practice: Expansion of Services Outsourcing bookkeeping, tax preparation, and other routine tasks can free up time and resources that can develop and optimize new business opportunities, marketing and providing quality services to clients. It can be a cost-effective way to scale your practice while maintaining quality control and attract as well as retain key staff. In the past tax season, the average hourly rate was about $160 for an itemized return and $150 for a non-itemized return. However, additional services were charged as given below: Service CPA Hourly Cost Full Payroll Management $100 QuickBooks or Bookkeeping Advisory $109 Management Advisory $158 Financial Statement Audits $164 Federal and State Tax Return Preparation $180 Source: NSA 0 6 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  9. Cost Reduction Outsourcing allows you to tap into a pool of skilled professionals at a fraction of the cost of hiring in-house staff. It converts fixed costs into variable costs through a pay-per-use model allowing you to leverage quality services without management efforts. The following table serves as a purpose of reference for saved costs with professional outsourcing services: Particulars Amount (In $) Annual Salary 39,800 Statutory Costs (FICA and State/Local Taxes) 10,959.62 Training and other costs 9,600 TOTAL ANNUAL EMPLOYEE COST 60,359.62 Total working days in a year (Excluding holidays and provision for sick leaves etc) 231 Hours worked in a year (Assuming 8 hours per day) 1732.50 Cost per hour 34.84 Time Availability Outsourcing frees up time to focus on revenue-generating activities. Rather than being bogged down with administrative tasks, you can use expertise to provide value-added services to clients. This can help to drive growth and improve the bottom line. 0 7 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  10. MAXIMIZE PROFITS WITH NSKT GLOBAL NSKT Global is a reliable outsourcing service provider with a team of Profitability Consultants, Certified Public Accountants, Certified Fraud Examiners (CFE), Certified Sarbanes-Oxley Experts (CSOE), Business Advisors, Internal Auditors, Data Scientists, and IT experts. With an experience of over 40 years in the industry, we have served numerous SMEs and established businesses in New York, North Carolina, South Carolina, California and Indiana. Through our in-depth domain expertise, customized solutions, complete industry knowledge and growth-oriented consulting, we can help you improve your practice with greater scalability and agility. NSKT Global can prepare a turnaround strategy that suits your business needs and power your growth potential. Our four key focus areas include: Restructuring We can help bring efficiency by merging core services and removing inefficiencies through reduced burden on time-oriented tasks. Cost Reduction Our services are tailored to reduce your business overheads, reduce operational costs and improve profit margins. Focus Area Repositioning We partner with our clients to identify key strategies for growth, add competitive advantage through skilled resources and improve core competencies with increased efficiency. Empowered Assets We add technology to people for enhanced business potential. Our tools and added expertise increase business value through stabilized and optimized business processes. 0 8 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

  11. CONTACT US Scan the QR to visit our website! NSKT Global New York Office: 99 Wall Street #5952, New York, NY 10005 Telephone: 718-717-2085 North Carolina Office: Charlotte City Center 25 North Tryon Street Suite 1600, Charlotte North Carolina 28202 www.nsktglobal.com usoffice@nsktglobal.com @nsktglobal South Carolina Office: 1019 Highway 17S-Suite 216, Suite 216, North Myrtle Beach, SC 29582 0 9 NSKT GLOBAL | UNLOCK YOUR FIRM'S POTENTIAL

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