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How good is your tax preparer?
February 4, 2013
by Brian Wolf

Yes, it’s tax time again. So it’s my annual time to play Paul Revere. “Tax time is coming . . . Tax time is coming!”

Don’t worry I won’t be riding through your neighborhood screaming at the top of my lungs anytime soon. But tax time is a very important time of year. While most people don’t look forward to this annual hassle, there are some who actually get a refund check.

Please remember that this is only the government repaying you the money that you loaned them for a year with no interest, so don’t get too excited about your check. The thing that you should get excited about is knowing that you have the best possible tax preparer available to you.

So what does this mean, and how could a person go about evaluating their own tax professional?

Let’s start with what a tax preparer’s job is, to begin with. Number one; complete the paperwork and electronically file your return accurately. Seems pretty simple, right? But with the tax code longer and more complicated than the Dead Sea Scrolls, maybe it’s not all that simple.

This depends upon if you have a tax preparer or a professional tax advisor. A tax preparer can be anyone – no really, I’m not kidding. Currently, you could pay someone who’s never done a tax return in their life and it would be legal.

Keep in mind that you can’t even get your hair professionally cut unless they have a license, which doesn’t make much sense to me. So, if basically anyone, whether they are trained or not, can do your taxes, what would be a step up? The next level would be someone who is an EA (enrolled agent) or a CPA (certified public accountant). Both of these require a person to know a certain amount of tax information and should be considered knowledgeable in the basics, and perhaps much more.

However, this is still a far cry from a true tax advisor. To be a good tax advisor you would most likely not only have your EA or CPA designation, but you would also have experience in coaching clients in the ways of tax reduction and advance tax planning with respect to business or estate planning, etc.

So now, it’s the time to ask yourself; am I going to a tax preparer or a tax advisor? Keep in mind that they would both do your tax return, but the tax advisor will give you another whole level of service and expertise that you won’t find with your traditional tax preparer.

Here’s another way to look at it. After your tax preparer did your taxes, did you meet with him anytime during the last year to do tax planning? Did he outline how you could lower your tax bill for the next year? Did he coordinate and work closely with your financial advisor to make sure you were taking advantage of all the successful tax strategies that are available to everyone; not just the “one-percenters?”

And, of course, let’s not forget about the fee for tax preparation. It’s been my experience that the fees for a simple return (retired couple, limited investments) will be in the neighborhood of $200 to $300. This seems rather large to me considering that the time it takes to do this return is maybe an hour. So, who thinks that data input into a computer is worth $200 to $300 per hour?

Now owning a tax practice myself, I certainly wouldn’t begrudge someone from making whatever they can on their tax practice – after all that’s the American way. However, I’ve never personally been interested in doing taxes as a business, just to make a lot of money in a three-month tax season. For me, I’ve always looked at it as a much bigger picture.

I believe that over the course of one’s lifetime, you will probably pay more than your fair share of taxes, so why not take advantage of everything that the tax code allows for? This can only be done with someone whoose training in not only taxes, but financial planning and estate planning, as well.

Abraham Lincoln had it right – “He who represents himself has a fool for a client.” I would also add that he who does not actively evaluate his tax preparer and financial planner, is just as foolish.

Tax Preparation Buffalo MN
Wolf Wealth Advisors your Buffalo MN
tax preparation professionals
http://www.TaxPreparationBuffalo.com/


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