Automation has become a popular buzzword in many industries, including tax filing services. However, the complex nature of tax laws and the unique circumstances of individual taxpayers and businesses result in a lot of missed opportunities when it comes to automated tax filing.
Is Automated Tax Filing a Good Choice For You?
Plug-and-play tax preparation software like TurboTax has become increasingly popular since the IRS introduced e-filing in the 1990s. These programs are marketed to consumers based on the ease and convenience of quickly inputting a few numbers and calling it a day. The trade-off is that a one-size-fits-all approach to tax preparation usually fails to capture the uniqueness of most tax situations and often fails to maximize your potential return.
If you are a new graduate with relatively few assets, an online service like H&R Block may be a good choice for you. However, if you are in any of the following situations, enlisting the guidance of a trusted tax expert is likely to give you the best opportunity to maximize your tax return:
- You’re self-employed, whether as the owner of a small business or as a subcontractor.
- You’ve experienced a significant life event like marriage, divorce, birth, death, business mergers, residential move, buying or selling a home, retirement, etc.
- You receive income from rental properties, foreign investments, cryptocurrency, stock trading, etc., or a bevy of less common income sources.
The reality of using an automated tax preparation program is that it delivers precisely what it sells: tax preparation. But what most taxpayers need to maximize their returns is tax planning. The best place to seek tax planning is with an experienced and trustworthy CPA firm like Steven Lissner & Company.
A CPA helps you identify tax savings and investment opportunities that will compound your capital across the span of many years. When you use automated software to file your taxes, you may miss out on opportunities to lower your tax liability. Over time, these missed opportunities can translate into thousands of dollars in lifetime savings. That’s why it’s important to enlist the guidance of a CPA to prepare your taxes — so you can explore every opportunity to maximize your tax return.
Tax Planning Is a Year-Round Effort.
Effective tax planning happens all year, not just during tax season. That’s why you don’t want to wait until tax season to contact a CPA. Steven Lissner & Company can help you right now, so you approach the coming tax season with reduced tax liability and get the maximum benefit.
A skilled CPA is well-versed on the many strategies businesses and individuals can use to create a winning tax strategy. With HSAs, FSAs, IRAs and other types of accounts available, a CPA can offer suggestions on the best way to utilize the various options out there.
It’s important to understand that small financial decisions can carry big consequences as the years pass. Sound financial decisions can increase and compound your long-term savings, whereas a lack of strategy can stagnate your savings.
The reality is that automated tax preparation programs can help you evaluate your current tax year. But they do not provide recommendations for your future or identify missed opportunities with enough time to take advantage of those opportunities. Simply put, unless you’re already a tax expert, automated tax filing programs are a losing tax strategy.
Get the Best of Both Worlds
We’ve explained the pitfalls of automated tax filing, but it is important to note that not all automation is bad. In fact, most CPAs use an automated tax program to assist in calculating returns. But there are some significant differences.
- Accountants’ tax preparation software is highly sophisticated. TurboTax, H&R Block, and other online programs boil down their interface to the basics so that it’s easy for the everyday user to figure out. However, that simplification can result in users missing out on important tax liability reduction opportunities.
- CPAs are highly trained in using their specialized tax software.
- A CPA knows how to work an automated system to your advantage by incorporating a holistic approach to tax planning.
Consider this example:
In 2021 you experienced more health issues than in previous years and you suspect your medical bills exceed 9% of your annual income. TurboTax alerts you to the option of itemizing medical expenses on your return — which become deductible once costs exceed 7.5% of your annual income. TurboTax will provide you with a list of obvious medical deductions like doctors bills and surgery costs.
You input that information but come up a little short. Without an experienced CPA’s guidance, you overlook several qualifying expenses like transportation costs to and from your medical appointments. As a result, you pay taxes on money that is actually tax deductible, significantly reducing your tax refund and compounding your financial burden.
It’s everyday situations like these that will cost you money by using a bargain online automated tax filing program instead of seeking the expertise of a trustworthy CPA firm like Steven Lissner & Company.
What Does it Take to Become a CPA in NJ?
There is a lot of education and training required to become a CPA in NJ. First, you must obtain a bachelor’s degree plus 30 additional semester hours from an accredited institution. A significant amount of credit hours is devoted specifically to accounting and business education. After graduation individuals must pass a 16-hour exam and then complete 1,750 hours of supervised work under a licensed CPA.
These rigorous requirements ensure that you will receive quality tax planning guidance from a CPA.
There is another advantage that goes beyond technical skill or financial aptitude — a good CPA also provides a human touch. When you hire Steven Lissner & Company, you’ll meet with a real person to discuss your financial situation. Our accountants take the time to thoroughly explain anything you find confusing. You won’t find any friendly conversations or detailed explanations in a bargain online tax filing program.
When your circumstances change, you need prompt answers to important questions. CPAs are available year-round to answer questions and guide your financial decisions. Whether you’re setting up a college fund or moving across state lines, CPAs deliver superior customer service.
Tax Preparation & Tax Planning with Steven Lissner & Company
At Steven Lissner & Company, our accountants deliver customized tax planning and preparation solutions for individuals, couples, and small businesses. With over 30 years of industry-leading experience, our CPAs know how to harness the power of tax automation without losing their human touch.
We excel where big-name automated services fall short because we believe a solid financial blueprint involves careful planning. Whereas programs like TurboTax provide only a snapshot of the last tax year, we help you craft a winning financial strategy that will ensure your fiscal success for years to come.
To experience the Steven Lissner & Company difference, contact our team of tax preparation advocates today! Your biggest tax refund yet awaits you!