With the U.S. tax deadline in the rearview mirror, I often reflect on my experience through the tax season, as tax preparation has never been something I enjoy. As many of you know, I am a licensed CPA; however, I have made the conscious decision not to prepare my own return. It is not that I lack knowledge of the tax code, but it is just that I just don’t enjoy the process. In fact, I prepared my own annual return for many years. Now I find comfort in the fact that I have another professional who prepares taxes full-time who can serve as a second pair of eyes. This helps ensure I do not miss any changes in the taxes that might affect my situation. It also provides me a resource who I can call on with tax interpretations in the future.
People who are quite capable of doing tasks themselves choose to outsource responsibilities, and the reasons vary. My reasons include the following:
1. Expertise and Specialization
· I hired a tax professional who does many returns and has been doing them for years. They have experience filing business taxes, they are staying current on changes that might affect my situation and has likely performed these services hundreds (if not thousands) of times.
2. Time Savings/Increased Efficiency
· The fact that I do not have to fill out my return and read the latest announcements on tax law changes frees up my time to spend elsewhere. I just drop off my information and update my preparer with any changes in my situation. They process the return and then I come in to review and sign. It saves me time.
3. Access to Technology
· I don’t have to either prepare my return by hand or purchase the latest version of tax software to file the return. They have already invested in the tools to make the process efficient.
4. Cost Savings
· Although I am capable of preparing my own tax return at a lower dollar amount, I do believe the peace of mind I receive is worth the difference in cost. I also believe having a second look on my return may help avoid a more costly mistake down the road.
Similarly, as financial planners, we allow our clients to outsource financial planning and investment management. Many clients, including former financial professionals, choose to use our services for the same reason I hire a tax preparer.
On our end, in addition to our core services, we continue to monitor the tax code, but with the focus on helping our clients plan for the effect of taxes on their futures. We believe we provide expertise and specialization, time savings and increased efficiency, and access to financial planning technology, all of which can help prevent clients from making long-term costly mistakes in their financial lives.
We look forward to continuing to help you and others on your respective financial journeys.