AT&T Offers Tax Tips

[BP.]

"W" sells commodity items. Professional tax prep isn't a commodity. Don't compete on price. If you perceive you have competition that is focused on price, it is an opportunity for you to compete based on the value of your personal services. That's something only you can provide, and chances are you'll find a part of your market that values that.

[gkaiseril]

Ask the Box

When they come in for help explain that your time is valuable and you provide free information to your tax clients, but all others have to pay your consulting fee or they can ask their box.

[joanmcq]

"Several of us rework "messed-up" TurboTax cases, -- last year I made about $300 doing that -"

Of course I made quite a bit more last year doing that...pays my salary, health care, not to mention the clients I pick up because they refuse to deal with it any more. It's cheaper to pay me to prepare it.

[Black Bart]

Sorry,

"Several of us rework "messed-up" TurboTax cases, -- last year I made about $300 doing that -"

Of course I made quite a bit more last year doing that...pays my salary, health care, not to mention the clients I pick up because they refuse to deal with it any more. It's cheaper to pay me to prepare it.

I didn't mean to attack you personally, it's just that your post raised some issues I wanted to discuss. There are exceptions of course and It's good that you're doing very well on the reworked returns, but I doubt that most preparers could say that such work pays what they would consider a normal salary in addition to the cost of their health care. I may be wrong but California and Arkansas are likely at the (respectively) top and bottom of the pay scale and, as the weight loss ads warn, it may be that those "results are not typical." I'd be very much surprised if yours was the average situation throughout the country.

Too, I have to disagree with BP's position. I feel that tax preparation is very much a commodity, that we must at some point compete on price (you have to be somewhere in the ball park), and that the consumer's perception of preparers is much more important than how we choose to perceive ourselves and our situation.

As for quality service, yes, that's always been our strategy all along to fight off the corporate raiders, but Nashville's departed full-service gas station operators also furnished that. I'm not saying our profession's doomed, but I am saying there's a problem looming and we should recognize it rather than scoff at it. People can only posture themselves as above-the-fray as long as they have enough money to.

And no, I don't have any quick solutions any more than anybody else does, other than maybe to take some advice that Sea-tax and Veritas gave me a couple of years ago. They said to get a Series 7 broker's license and add stock and bond sales to my "services." I might now take a second look at that suggestion..

[Holland]

I agree with Black Bart

Too, I have to disagree with BP's position. I feel that tax preparation is very much a commodity, that we must at some point compete on price (you have to be somewhere in the ball park), and that the consumer's perception of preparers is much more important than how we choose to perceive ourselves and our situation.

As for quality service, yes, that's always been our strategy all along to fight off the corporate raiders, but Nashville's departed full-service gas station operators also furnished that. I'm not saying our profession's doomed, but I am saying there's a problem looming and we should recognize it rather than scoff at it. People can only posture themselves as above-the-fray as long as they have enough money to.

When the big box retailers moved here, there were a lot of business failures, but they were primarily the operators who had made no changes in the last half-century and did everything just the way Grandpaw did it. The businesses that changed, modernized, provided reasonable service, cut costs, ie used management skills are doing very well indeed.

And yes, I have been able to reduce my costs 10% per year for the last three years without reducing service and I intend to keep on trying to do so. I am getting new referrals from my current client base, but other than those, all of my new clients are coming to me primarily on price.

[S T]

Well taxmandan

Depends on what year you have your software renewal. And then it depends whether or not your software decides to exercise a merger.

ATX is a current example with CCH!

Before that several years ago, Lacerte was on its own then merged with Intuit, and we all know Intuit.

So I have always looked to that as one of the factors in purchasing my tax software, however, somewhere along the "road" there is another path.

Sandy

[Black Bart]

This thread has come a long way, but

...

I have been able to reduce my costs 10% per year for the last three years without reducing service and I intend to keep on trying to do so. I am getting new referrals from my current client base, but other than those, all of my new clients are coming to me primarily on price.

as long as we're pretty far afield anyway, would you tell us how you've reduced your costs 10%? Mine keep going up about 10% or so every year and if there's something I'm not doing that I could do, then I'd be interested to know if you wouldn't mind sayin'. Have you gone paperless? Other stuff? Thanx for any tips.

[Holland]

I try to not waste my time

as long as we're pretty far afield anyway, would you tell us how you've reduced your costs 10%? Mine keep going up about 10% or so every year and if there's something I'm not doing that I could do, then I'd be interested to know if you wouldn't mind sayin'. Have you gone paperless? Other stuff? Thanx for any tips.

Well... I try to do a constant analysis of costs in my practice. I set my own value at $100 per hour and the base pay for all of my staff is $10 per hour. Hence, who should lick stamps? Who should set appointments? Etc. Once I got that far, I realized that only a few minutes of my EA skills and knowledge are required for most of my simple returns. For most clients, I spend longer chatting with them and asking about new items than I do preparing the return. Then I switched to Drake software because my testing showed me that I could process returns much faster (more cheaply) using that software. So now I try to push all the tasks that can be done reliably by a temporary clerk onto a temporary clerk leaving me to deal with more important stuff. I am now experimenting this year with having the staff do most of the input of information leaving me with a review. I am fortunate that I have no difficulty hiring very reliable employees at a very reasonable price. And yes, we have been paperless three years, we give client copies on CD, we are relying more and more on email, etc.

[travis bickle]

i dunno but,

Isn't 'free file' only available to taxpayers below a certain income level? Or was that only one year?. . . .

if you go to TaxAct's website, they blaringly say "no restrictions".

i interpret "no restrictions" to mean any income level.

regards,
travis

[joanmcq]

Bart:

I can say TT users pay my salary and health care because my PT 'day job' is working for the firm that provides TT audit defense. THEY pay my salary, and I work enough to get health benefits (because of pre-existing conditions its the only way I can get benefits). So I end up defending the TT users that buy audit protection and screw up their returns. That's why I have so much experience with CP2000s!

I used sell cars and worked with a guy that sold cars during the day and repo'd them at night...got paid on both ends. So I'm luckily in the same boat.

[Black Bart]

That sounds like

...my PT 'day job' is working for the firm that provides TT audit defense...I end up defending the TT users that buy audit protection and screw up their returns...

a very interesting job and you have indeed developed an expertise about the CP notices. I think most of us here have handled a few, but I was impressed by your posts about them which almost had the ring of an IRS insider.

If you're allowed to say, can you tell us about what percentage of TT returns end up in the hands of the audit firm and what percentage of the market that TT feels it has cornered?

Thanks.

[joanmcq]

Sorry, Bart, I don't have the stats on it how many end up in audit or what percentage of the market TT has. I don't actually work for TT, but for an independent firm. We sell the same protection to anyone, and also run a tax hotline and do research for tax pros as well as doing the TT 'pro review'. We do get to see what a lot of self-prepared returns look like though, and what kinda stuff the IRS is looking at in a large scale. For full scale audits, its EBE, charitable, Sch C and F. The 2006 CPs are trickling in, and like always, they start with Sch D. Stock options keep my paycheck coming!

[Black Bart]

This post

My bank and many others that I looked at offer the Turbo Tax link...They said they received a tiny stipend when someone clicks thru and uses Turbo Tax...they...get $ 1.00...I looked at other banks around my area and lo and behold I found the same Turbo Tax offer there...

made me curious, so I just now looked up our local banks on the Net. Sure enough, one of them has the TurboTax link. As it happens, I had a secondary account with them (the dirty, rotten, low-down rats) until the first of this year when I closed it. Maybe I should reopen it so I could reclose it.

I just checked my main account (at a different local bank) and they don't offer TurboTax. Lucky for them -- if they ever do, then I'll show 'em -- I'll move my overdraft somewhere else!

[gkaiseril]

Give Them the Message

You should make sure the bank gets the message. Send a letter to the president of the bank and thank him for the years of fine service his bank has provided and then explain why you are closing your account. In terms like you do not think it is appropriate for the bank to provide a competing service to its customers' services and that you can not open a bank in compition to his. Also you might explain to him you provide a more personal service to your tax clients with year round advice and help that the web site can not. Also if you are an EA CPA or attorney, you should explain that you can represent your clients at audits, appeals and the U.S. Tax Court and that web links can not.

[Lion]

Tt

Received an email from my bank touting Turbo Tax and providing a link. I responded to the bank marketers that send the email, but I like your idea of a letter to the bank president. I'm going to follow your advice.