As CPAs navigate an evolving landscape, understanding CPA trends will be crucial to staying competitive and providing value to clients. Read on for 2025’s top CPA trends, highlighting the impact of the expiring Tax Cuts and Jobs Act (TCJA), the dangers and opportunities of technological advancement, and increasing business costs.
The expiration of the Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act (TCJA) changed everything from deductions to tax credits for businesses, but many of its provisions will expire in 2025, affecting both businesses and individual taxpayers. For CPAs, the focus will be on preparing to help guide clients through the transition. Key changes include the following:
- The corporate tax rate reduction from 35% to 21% is set to revert, impacting business profitability.
- The Section 199A deduction for qualified business income of pass-through entities may no longer be available.
- Changes to deductions for business interest expenses and like-kind exchanges will also revert to pre-TCJA rules.
CPAs must stay informed about these changes and proactively advise clients on tax planning strategies to deal with potential impacts.
Also read: Proposed Uniform Accountancy Act Changes: What CPAs Should Know
AI and data analytics: Leading CPA trends
Technology advancements continue to affect the accounting profession, with AI and data analytics at the forefront. CPAs must demonstrate their ability to learn new skills and integrate these technologies into their practices if they are going to benefit from:
- Routine task automation – AI can handle repetitive tasks such as data entry and reconciliation, freeing CPAs to focus on more complex and strategic activities.
- Improved decision-making – Data analytics tools provide deeper insights into financial data, enabling CPAs to offer clients more accurate and strategic advice.
- Enhanced accuracy – AI reduces the risk of human error, ensuring greater accuracy in financial reporting and analysis.
To stay competitive, CPAs should invest in training and development to harness the full potential of these technologies.
Also read: The 2025 Outlook for Cybersecurity Trends
Rising business costs and fee adjustments
A recent survey indicates that over half of accounting firms plan to increase their fees in 2025 due to rising business costs. The survey found that 57% of firms intend to raise fees across all services, with significant increases expected in tax preparation, advisory services, and bookkeeping. To manage rising costs, CPAs will have to consider:
- Adopting fixed-fee and value-based pricing – This approach aligns fees with the value provided to clients rather than the time spent, offering greater transparency and predictability.
- Investing in technology – By adopting automation and efficiency-enhancing tools, firms can reduce operational costs and improve service delivery.
Increased use of blockchain
For the accounting industry, blockchain technology has the potential to enhance security, transparency, and efficiency in financial transactions. The technology allows for automating transactions, which reduces errors and increases efficiency. It also enhances security with its strong cryptographic basis, offering near-unbreakable protection against fraud and unauthorized access. Blockchain also transforms audits by streamlining the processes and providing auditors with real-time access to verified financial data.
As blockchain becomes more mainstream, CPAs must develop an understanding of its applications and implications for their clients.
Also read: How to Conduct a Cybersecurity Assessment
The shift to cloud computing
Cloud computing offers improved accessibility, scalability, and cost savings. By leveraging cloud-based accounting software, CPAs can access client data from anywhere, collaborate in real-time, and provide more responsive services.
- Scalability: Cloud solutions can easily scale to meet the growing needs of a business, allowing CPAs to manage increasing volumes of data and transactions.
- Cost savings: Cloud computing reduces the need for expensive on-premises infrastructure, lowering IT costs.
- Enhanced collaboration: Cloud-based tools facilitate better collaboration between CPAs and their clients, improving efficiency and service delivery.
The need for enhanced cybersecurity
Protecting client information from cyberattacks is essential for maintaining trust and compliance with regulatory requirements. CPAs should adopt data encryption to protect sensitive information from unauthorized access. Regular security audits help identify vulnerabilities and implement necessary improvements, while employee training on cybersecurity best practices reduces the risk of human error leading to security breaches.
By investing in robust cybersecurity measures, CPAs help protect against potential threats while building trust with their clients.
Professional Liability Insurance for CPAs
As legal and CPA trends evolve, CPAs need comprehensive professional liability insurance to protect themselves from potential legal bills. The right insurance provides financial support in the event of a covered claim, protecting CPAs from the threat of ruinous legal bills and defending their firms.
McGowanPRO offers specialized Accountants Professional Liability Insurance, representing leading carriers and providing competitive policy rates tailored to the needs of accounting firms. Contact a McGowanPRO expert to learn how the right insurance policy can help safeguard your firm against new developments in the accounting industry.