Today's post is by Judy, based on her experiences with the Twin Translations (an S-corporation) tax preparation process in the U.S.
Doing my taxes, both business and personal, has always been one of the tasks I gladly outsourced. However, our long-term CPA made a significant mistake last year, didn't return five or six messages we left her, but still sent us a holiday card thanking us for her business (an apology would have been better). I won't work with her again, so I met with a few other CPAs in town. I am really not that price sensitive as long as I feel that I am getting value, butI was quite underwhelmed by my experiences meeting with CPAs. None of them really gave me the feeling that they would add value to my tax process -- in particular, that they would find me deductions I wouldn't myself find, would make the process a breeze, and that their pricing structure would be transparent. None of them had price lists, and most couldn't give me a specific amount that my tax returns would cost after I'd told them exactly how I would submit the information to them (that is, I would NOT hand them a shoebox full of receipts). Some gave me ranges for estimates, for instance, $200 - $350 for one return. That's a wide range, and didn't make me feel warm and fuzzy. A $300 - $350 range would have been acceptable.
I am no tax expert, but I've read several books on taxation for small businesses, and the CPAs I interviewed didn't really sell me on their services. Perhaps they do know how to find these deductions, but they didn't tell me, so I am not hiring them. If it cost me $500 to have my taxes done, but it would make my life easier and I would benefit from all kinds of semi-secret tax code things I don't know about, I would be all for it. However, as things stand right now, hiring a CPA just creates more work for me. I have to compile my (highly organized) information, send/e-mail the documents, perhaps drive to the other side of town for a meeting -- all that for someone to (presumably) plug my numbers into a tax software? Plus, I do like having control of all the steps of the process, because it makes me feel more vested, so with the help of the dummy-proof (I need it!) TurboTax, I can plug in the numbers myself. I got a great deal at Costco for our personal taxes (Deluxe edition) and went to OfficeDepot to get my full business version. I used my rewards card, which means I'll get a $20 coupon in the mail soon. Of course, hiring a professional has many advantages, including a buffer if and when the IRS should audit you. However, my accounting is quite transparent and easy, and I shouldn't have anything to fear from the IRS. For the record, according to TurboTax, the chance of my S-Corp getting audited is 0.4%.
I am sorry, dear CPAs and fellow small business owners: you didn't convince me that you'd add value to my process, regardless of the price. What do our fellow translators think? How do you handle your taxes?
Doing my taxes, both business and personal, has always been one of the tasks I gladly outsourced. However, our long-term CPA made a significant mistake last year, didn't return five or six messages we left her, but still sent us a holiday card thanking us for her business (an apology would have been better). I won't work with her again, so I met with a few other CPAs in town. I am really not that price sensitive as long as I feel that I am getting value, butI was quite underwhelmed by my experiences meeting with CPAs. None of them really gave me the feeling that they would add value to my tax process -- in particular, that they would find me deductions I wouldn't myself find, would make the process a breeze, and that their pricing structure would be transparent. None of them had price lists, and most couldn't give me a specific amount that my tax returns would cost after I'd told them exactly how I would submit the information to them (that is, I would NOT hand them a shoebox full of receipts). Some gave me ranges for estimates, for instance, $200 - $350 for one return. That's a wide range, and didn't make me feel warm and fuzzy. A $300 - $350 range would have been acceptable.
I am no tax expert, but I've read several books on taxation for small businesses, and the CPAs I interviewed didn't really sell me on their services. Perhaps they do know how to find these deductions, but they didn't tell me, so I am not hiring them. If it cost me $500 to have my taxes done, but it would make my life easier and I would benefit from all kinds of semi-secret tax code things I don't know about, I would be all for it. However, as things stand right now, hiring a CPA just creates more work for me. I have to compile my (highly organized) information, send/e-mail the documents, perhaps drive to the other side of town for a meeting -- all that for someone to (presumably) plug my numbers into a tax software? Plus, I do like having control of all the steps of the process, because it makes me feel more vested, so with the help of the dummy-proof (I need it!) TurboTax, I can plug in the numbers myself. I got a great deal at Costco for our personal taxes (Deluxe edition) and went to OfficeDepot to get my full business version. I used my rewards card, which means I'll get a $20 coupon in the mail soon. Of course, hiring a professional has many advantages, including a buffer if and when the IRS should audit you. However, my accounting is quite transparent and easy, and I shouldn't have anything to fear from the IRS. For the record, according to TurboTax, the chance of my S-Corp getting audited is 0.4%.
I am sorry, dear CPAs and fellow small business owners: you didn't convince me that you'd add value to my process, regardless of the price. What do our fellow translators think? How do you handle your taxes?
6 comments:
Very Nice Article!!
Take a look at this site. It was written by a professional tax consultant specifically for freelance translators:
http://www.johnmatthews.us/Tax%20Tips%20for%20Translators.htm
I personally always go to a CPA. But, unlike your experience, I found that he DOES add value, does find me deductions I would not find, and he also does all that stuff with deprecations and all that is way over my head. ;) I trust him to keep up on all the current tax code which I would never do - ugh. I did my own taxes, and my husbands, for many years, when it was the EZ form. However, I appreciate the professional help now that we have various investments, a business and our personal taxes. I did go to someone else one year after I moved further from my regular CPA. The next year, I went back to him - and drive an hour each way - and having been doing so for a decade because I trust him. But, like you said, if the person is wasting my time or can't add value, I would do it myself. In the case of my CPA, he saves me time and money and stress.
I considered hiring someone as well, but in the end I used TaxACT.com, which worked out quite well. It was easy to navigate, took no more than a few hours, and it handled everything I needed it to. Federal and State e-filing were included for just $17.95 (the "Ultimate Bundle"). I'll definitely be a return customer next year.
As a U.S. American living in Germany it is becoming more difficult for me to file my U.S. taxes since I all of my income is now based on my freelance work. I have had similar experiences with both American and German tax professionals, and while a very good accountant still files our German taxes, I am doing my U.S. taxes myself. This is a great example for service providers to demonstrate why they must give specifics regarding both service scope and price. And as a service provider, I need to do that too.
Preferring to do as much for myself as possible, I used to do my own taxes, which is time-consuming, but not nearly as complicated as most people fear. Last year, however, I tried TurboTax for the first time (still holding the reins) and was duly impressed with its ease of use. The deluxe version is fully sufficient for most freelancers and presumably for S-Corps as well. Having done my own taxes in the past, I am familiar with the calculations it makes "behind the scenes" and really appreciate all the time it saves me. I think it's well worth the modest price. Use it with confidence, and spend some of that money you're saving on a thank you card for your ex-CPA (for the inspiration)!
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