The Corona pandemic has placed unprecedented stress on the accounting and taxation processes. The epidemic has not only affected the field of business management, even businesses that were well-established organizations, performing in the market for so many years and which were considered highly stable against recession, were also adversely affected.
Millions of people have lost their jobs or are working with pay cuts. Subsidiary packages have been announced by governments, but the announcement of incentive packages, including tax cuts, has created new challenges for taxation and accounting professionals.
Bookkeeping outsourcing can help simplify and accelerate key aspects of your business. You just find out what the epidemic is doing to your business, let’s now know the new tax implications and benefits of outsourcing accounting related to it:
Impact of Pandemic on Businesses:
Covid-19 can be classified in the following 3 categories in terms of the impact of the epidemic.
Crisis Management Mode:
In this mode of crisis management, companies form a large group of people affected by the epidemic and they take the following few steps to ensure the survival of the business:
- Reducing the workforce
- Coping with new relief legislation
- Navigating a new virtual work environment
- Ensuring business continuity
The surge in demand:
During this epidemic, there are some companies that have experienced an increase in demand for their services or products and are considering the challenge of maintaining it. It includes the following areas:
- Essential Services like medical, food and telecom
- Businesses that help others such as home delivery and remote work applications
- Businesses that support other industries such as manufacturers supporting essential services
All countries have experienced trade disruption during the lockdown caused by the epidemic. Governments of all countries have announced relief or incentive laws during lockdown which have had an impact on tax requirements. Handling these changes in accounting and taxation processes further emphasizes the benefits of outsourcing services. Some of these tax assessments are as follows:
Tax exemption from the CARES Act:
The US government enacted the CARES Act in late March 2020, which brought in several tax code changes affecting the federal income tax. This has an impact not only on federal and state taxes but also on international taxes.
Tax Cuts & Jobs Act:
The IRS Large Business and International Division recently launched a new campaign for changes to the “Tax Cut and Jobs Act”, a tax reform law, and the CARES Act. It aims to identify other issues related to restructuring, transactions and changes in tax law and this process may include:
- Soft letters
- Improved practice units
Benefits of Outsourcing Accounting Services:
Today, when the whole world is facing the financial impact of this epidemic, you need the right services from a reliable accounting and tax firm. We can help your business meet the challenges that arise during this time. Some of the major benefits of outsourcing accounting are discussed here:
The coronavirus epidemic has wreaked havoc on the entire world economy and has brought businesses into a difficult phase. The whole business landscape is going to change after Covid-19 and you have to adapt to these changes. There will be a need as well to bring ourselves in a position to take fast action. One benefit of outsourcing services will be that they will help you to meet new challenges and demands and can also help you to take advantage of new economic opportunities.
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