This Summer is a great time to evaluate the tax season and make a plan for next season. Beyond staffing and process improvements you should be looking at the services you offer and what you plan to offer or focus on next season.
We’ve been watching the industry and the news closely and have 4 reasons why you should focus on complicated returns next tax season.
Tax Software Competition is High
Tax software has made filing taxes easier and more convenient for taxpayers. Their marketing is aggressive and their apps and software are extremely user friendly. Thanks to the convenience and price point, more and more Form 1040 taxpayers are opting to use software over tax preparation services.
People with complex tax situations are more likely to seek out a professional to make sure that they file properly and pay the least amount of tax liability. So why not target them next season?
IRS Free File
In addition to tax software companies, there’s the IRS Free File option. Taxpayers with an adjusted gross income of $64,000 or less can use the IRS Free File option and essentially bypass the need for purchasing software or hiring a tax pro. It’s estimated that 70% of taxpayers are eligible for this service.
IRS Free File essentially eliminates your 1040 clients but it does not eliminate businesses or individuals with complicated tax situations.
Tax Reform is Coming
One of the big campaign promises of President Trump was to overhaul the tax system and simplify the tax code. The GOP is currently hard at work creating a blueprint for what that system will be. What will be passed is still up in the air but a simplified tax code will mean that filing taxes is going to be a lot easier for the general public. However, those who have to deal with tax complications, such as capital gains, rental property, business income, tax credits, estate taxes, etc. are going to need some tax planning help. Complications and a need for a tax pro are going to be inevitable for those with complicated tax situations.
For more on the possible tax reform, read What Tax Reform Will Mean for Tax Pros.
You’ll Make More Money
Focusing on complicated returns will bring in more revenue because complicated returns come at a higher cost to the taxpayer. They require multiple forms and more time and know-how to prepare.
Spend the off-season finding ways to market to people with more complicated tax situations. For some, that may mean more tax training to acquire the knowledge. Take advantage of our Early Bird Special and save 25% on Tax Courses and CE Seminars so you can be ready to take on more complicated returns.