Clients come into our office with all kinds of issues. Some need a crash course in retirement planning. Some just have too much money that they cannot wrap their heads around what to do with it.
A lot of clients come to us after getting bad advice at another company. My coworkers like to say that the IRS is our best referrer.
Cheap Tax Services are Cheap for a Reason
H&R Block or Jackson Hewitt are great companies. TurboTax is a nifty piece of software. H&R Block, TurboTax, and Jackson Hewitt are in the business of filling out tax forms. That does not mean they are in the business of giving intelligent advice.
I am not trying to attack any of these companies. They serve a purpose and do that very well. They help average people fill out tax forms. Taxes are complicated so some people need help.
However, an inexpensive tax service is not for advice. H&R Block does not hire CPAs or accountants. It hires people for seasonal data entry work to complete tax forms. You do not need any formal education in accounting to be a tax preparer. You just have to be able to type numbers into the right spot. Trust me, many of my friends worked as tax preparers in college…and you can bet they went to work hungover.
Pay for Tax Advice
CPAs do not get paid a lot of money to fill out tax forms. In fact, CPAs do not look at a tax form unless they are working with someone on a special case with the IRS. A CPA is basically a tax interpreter – someone who has studied the tax code and who can look at your tax concerns and make a decision about it. The CPA then passes that knowledge to the tax preparer – someone who makes much less money than the CPA.
CPAs and tax preparers are like doctors and nurses.
Tax preparers are not paid to think about taxes. CPAs are paid to think about taxes. CPAs are paid to know how a financial transaction or maneuver should be reported to the IRS. They are also paid to find the best way to manage your money so that you do not pay more taxes than you need to.
If you need advice about how to reduce taxes, how to move funds without triggering taxes, or how to claim something on your taxes, you need to talk to a CPA. If you do not want to take the time to fill out a tax form and you understand how the tax code works, you should go to a tax preparing company.