What's Your Tax and Compliance Strategy for 2025? Takeaways from ADP's Accountant Connect Summit
The ADP Accountant Connect Summit brings together thought leaders to tackle key tax and HR compliance issues to help prepare firms and accountants for what's next in the profession. During the fourth annual event, experts provided valuable insights on the impact of the new administration, new SECURE 2.0 Act updates, remote work, and the future of the IRS's Direct File program.
Jody Padar (also known as the Radical CPA) moderated a panel at the summit focused on 2025 tax and HR compliance updates. Participants, including Amy Miller, CPA and ADP's senior director of government affairs; Kelly Phillips Erb, the Tax Girl and tax counsel at White & Williams, LLP; and Ron Ulrich, retirement services executive at ADP, discussed the ways in which they guide their small business clients through the shifting tax and compliance landscape.
Read on for some of the top takeaways from this event.
The new administration's impact on tax policy
Miller pointed out that President Donald Trump's cabinet nominations signal a push for pro-business policies and deregulation. However, we might not have clarity on potential new tax laws for a while.
"I think it's going to actually roll pretty slowly," said Erb. "And that's pretty much been confirmed by the incoming Senate leaders. They've said they won't do a big tax package at once. They're going to break it into two parts. The first will focus on spending in the early part of the year. After that, they will tackle the tax piece."
The good news? The upcoming tax filing season should be business as usual. Less good news? Planning for next year could be challenging.
SECURE 2.0 Act: New retirement plan requirements and opportunities
Ulrich emphasized the significant changes that took effect under 2024's SECURE 2.0 Act, with more provisions rolling out through 2027. Notable updates include:
- Mandatory automatic enrollment: New retirement plans must now include automatic enrollment provisions.
- Expanded catch-up contributions: Employees aged 60-63 can now contribute 150% of standard catch-up amounts.
- Long-term part-time employee eligibility: Employees with at least 500 service hours over two consecutive years must be allowed to participate.
- Savers match program (effective 2027): The federal government will match contributions up to $1,000 for eligible employees.
The saver's match is particularly interesting. Instead of taking the form of a tax credit, the match is deposited to eligible taxpayer retirement accounts.
"There's a lot to work out for how exactly they're going to do it," Miller said. "How do they know what account to deposit to? It will possibly require more IRS forms, and that's what they are working on right now."
Remote work and tax implications
Though return-to-office mandates are all over the news, remote work remains a reality that presents significant tax challenges for small businesses. Erb highlighted some of her biggest concerns for accountants, advisors, and their clients:
- Home office deduction limitations: Currently, employees cannot claim home office expenses under TCJA provisions. Many business owners might not know that they can reimburse employees for their home office expenses, turning a non-deductible employee expense into a deductible business expense.
- State tax compliance: Employees who can work from anywhere might consider moving on from high-tax states. This modern workforce mobility can be tough for employers, who must navigate multi-state tax regulations, state payroll tax obligations, and paid leave requirements. The $10,000 state and local tax (SALT) cap plays a big part in this incentive to move to lower-tax states, and we're already seeing bipartisan support for its elimination.
Both areas represent a chance to offer value to your clients. You can help business owners comply with state laws, explore reimbursement options as an employee retention strategy, and take advantage of valuable advisory, compliance, and tax planning opportunities.
The Direct File program's uncertain future
The IRS's Direct File Program received rave views in its pilot year, and the program is expanding in 2025, allowing eligible taxpayers to file federal and state returns directly through an IRS-developed platform.
However, funding for the Direct File Program came from the Inflation Reduction Act, and President Trump ordered federal agencies to "immediately pause the disbursement of funds" after his inauguration. "If the Inflation Reduction Act funding goes away, can they continue to support the program?" Erb wondered.
The second area of uncertainty involves the Department of Government Efficiency (DOGE). "Elon Musk has suggested it would be great if the IRS had a free app that you could [use to] file taxes from your phone, which is Direct File," Erb pointed out. "Does that mean he would like to replace Direct File with a new app? Do they want to expand the program? Is he just touting the program? There are a lot of questions surrounding what the next steps might be."
For accountants and other tax professionals, the takeaway is communication. Even if we don't have all the answers yet, consider discussing these and other tax and compliance issues with your clients. In addition, expansion of Direct File or a similar app-based return solution could create opportunities for accountants to focus on advisory services, as simpler returns move to the platform.
ADP's Accountant Connect can help you stay on top of emerging issues, save time, and expand your role as a strategic advisor. Get started with our free, complete platform for payroll, tax, HR, and data-driven insights.
