Taxes are a pain, a big pain in the butt. Plain and simple. I’ve been filing taxes since my very early years working my first job as a bag boy in a grocery store. And let’s not leave out that promotion to produce clerk. I was proud but, the the sting of the federal and state government reaching into my pocket at this young age, hurt. At this stage of life (due in large part to my small amount of earnings), the money was returned to me with the filing of a 1040 EZ tax return. So, this started the all to familiar cycle of making money, paying taxes, filing returns and sometimes receiving some of it back. And, I am certain this will continue until I die. Just like that saying.
How seriously do we Americans take tax preparation? Well, when you consider the number of tax prep offices that open seasonally everywhere from your local strip center to your local Wal Mart, Americans are very interested in paying their fair share. In addition, “there were 300k people employed at 109k firms in 2012 – generating $9 billion in revenue in 2012. The industry grew over 2% from 2010-2015, and is expected to speed up the pace of growth. Revenues of $11 billion are forecast for 2018″(1) And our personal seriousness in approaching our tax perparation is no different.
We were so serious that one tax season my wife and I had taxes prepared three different ways by three different people. The first time we prepared our taxes we used a popular tax prep software. I diligently gathered all the forms and dutifully answered each of the millions of prompts to arrive an answer. The final total was a tax bill 50% higher than last year’s return prepared with the same software. Something didn’t seem quite right.
Ever curious and exasperated, we sought a professional opinion from a referral to a well respected CPA firm in a nearby town. We brought the same documents to the CPA and they prepared the return. Incredibly the CPA firm calculated that we owed more than the tax prep software claimed we did! How was that possible?
Puzzled and determined, we sought out another tax prep professional.We were referred to a woman about 30 minutes away. Just as we had done with the CPA firm, we took all of our forms and trekked the 30 minutes to her office. We sat with her anxiously as she calculated our return. After about an hour of questions and her calculator work we had our return ready to file. And what was the answer? Well, we liked the answer so much that we continue to use her regardless of where we live. Make no mistake, we pay our fair share. Sometimes, I feel like it’s more than we should.
Why would someone in their right mind prepare taxes three times? Simple, we didn’t like the answer we were getting. Here’s to hoping your returns this year are fair and you are happy with your answer.