In a number of industries, language serves as the barrier of entry. If you study law, then codes, laws, and court cases become second-nature. If you join the military, your concept of the alphabet can change over the course of boot camp. And even if you just jump into a startup, there’s undoubtedly a slew a acronyms that’ll be used internally that, to a layperson, don’t make a ton of sense.
On the one hand, this makes expertise in any given field a valued commodity, but on the other hand, this can also lead to people being taken advantage of. This is one of the stigmas a CPA will always need to combat and it’s why many people turned to software like TurboTax. TurboTax does make taxes easy. It puts the jargon-laden, annual, government-mandated homework assignment into simple terms and for many individuals this is helpful. It streamlines a process that historically has taken Americans 12.5 hours (on average) every year. The simplicity of software is appealing, but if you’re looking to save money or make more money year over year, then you can’t shoehorn your tax situation into a scaled software funnel. You don’t know what you don’t know. We’ve seen this first-hand in the US where 20% of the people who qualify for the earned-income tax credit, don’t receive for it; don’t apply it; and likely, don’t know they qualify for it.
And this is partly why taxes are so complicated, if you don’t take advantage of your savings and the money that’s owed to you, then that means more government spending. If it’s jargon-laden, then more often than not, people accept the “bill” at the end of the year. You can comb through your bank statements with ease and know what purchase was made when, where, and with what company with any inconsistencies typically flagged by your banking institution. Your bank doesn’t email you asking you to bring all your receipts from the last 12 months annually, they keep track.
All this isn’t to say that you shouldn’t trust your government, it’s simply to illustrate why taxes are complicated. And most of the world knows the United States has complicated taxes. In the Netherlands for instance, the government sends your taxes pre-calculated. Your job is to simply, check their work, and if it’s accurate, then you sign it and send it back. Simple! And they’re far from the only ones that have it easy which is why so many other countries view our tax system as an archaic ritual.
This however, is where CPAs come in. CPAs are experts in our tax system. They look for deductions, savings, and keep you informed of law changes (for better or worse). CPAs investigate your tax situation with a fine-toothed comb; they’re meant to be your advocate in the tax system. Saving you money is in their best interest as it means more business for them, and it’s why if you’ve repeatedly owed taxes, now is the best time to use a CPA. Even if you still wind up owing taxes this year, a CPA can provide you with the insight and tools to save money each subsequent year.
With taxes, the simplest solution (software) isn’t always the answer. It’s the same reason so many entrepreneurs start their business as a sole proprietorship — it’s easy, simple, and straightforward — when the reality is, most small business owners would benefit from restructuring their business as an S Corp and giving themselves a reasonable salary so they wind up being taxed less and growing their business more.
No matter what field you’re currently working in, if you want an advocate to help you navigate the jargon-heavy tax system, then work with one of our CPAs. We’re as interested in saving you money as you are.