With tax time upon us and tax preparation services deadlines looming, it is only natural for the tax sharks (not the IRS) to come out and look for prey. In their latest commercial, leading tax firm H&R Block intends to do just that, but are they telling you the whole story? We’ll analyze more about this confusing topic below.
1. “Did you know many CPAs don’t even specialize in preparing tax returns? Think about that.”
That is the figurative gauntlet thrown down by the firm’s latest video, which calls on unsuspecting tax payers to stroll into their offices and hope they are as good as their slick advertising portrays them to be. However, while it is generally known that a CPA isn’t needed to file a tax return, it also isn’t shared that a CPA focuses on taxes and accounting year round. The extra staff that is hired by H&R Block and its competitors may or may not specialize in preparing tax returns, and are very likely to return to an unrelated job after April 15th, which can literally be anything from mechanic to housewife.
Watch it in full here:
2. “We Live Tax”
Given that the only certainties of life are death and taxes, who doesn’t “live tax” as H&R Block’s self labeled Block Advisors do? They claim to know taxes from past years, present law, and to have strategies for the future. Again, this is something anyone can claim who has or is preparing tax returns as a professional.
Their claim that their Block Advisors average 15 years in tax return experience may sound impressive, but consider this: if you’ve filed a tax return for the last 15 years, so do you. Better questions we would ask a Block Advisor:
• How many tax returns do you prepare each year?
• Of these, how many came back with warnings or requests for more information?
• Of these, how many were audited?
• Do you prepare tax returns for individuals, families, small business, etc.?
• How many regular clients do you have?
• How long has your average client been hiring you to do their tax return?
3. Questions for CPA’s
H&R Block then goes on to ask their viewers to ask several questions of their CPAs.
1. Who actually prepares your tax return? Sounds good on its face, or as if those lousy CPAs are secretly outsourcing their tax preparation services and charging you full price. In actuality, if you paid a CPA to personally fill out your tax return, rather than check it, it could be very costly.
2. Can you meet with them? We’ve never met a CPA who refused to meet with current or prospective clients. Most will also allow it if you send in your tax information via email or other form.
3. What’s with all this paperwork? In less than complicated terms: welcome to taxes. Even a 1040-EZ looks complicated if you’ve never seen one before. There is nothing H&R Block, a CPA, or other tax return pro can do about it.
4. Will they be able to stand behind their work if the IRS comes knocking? This is one is probably the most important. Most audits and requests for more information from the IRS are triggered by a tax payer and employer filing different information with the IRS. Your tax return pro can confirm the validity of your documents if you use them. However, if you’ve eyeballed them, ballparked them, or other, there is nothing H&R Block, a CPA, or anyone else can do.
H&R Block vs. CPA vs. Tax Preparation Services
In short, there are different needs for tax return preparation depending on each client that can be handled by different pro’s. For these three, it’s generally:
• Tax preparation services – save the money of paying a CPA and acquire the services of someone who does taxes, bookkeeping, and accounting year round. Those with a brick and mortar practice and history of satisfied clients should be given the highest consideration.
• CPA – good choice for those who have one on staff or who have large businesses in need of all the deductions and credits they can get.
• H&R Block – As tax time continues, their rates will rise as they know clients can’t shop around. Only a good choice for their “free” promotions if you qualify. All else consider a tax pro in your respective area who works in the business year round.
Tax Preparation Services in Houston
If you live in Houston and need help with your tax preparation or bookkeeping in general, give us a call at 281-894-6494 or send us an email.