Growing Without Rain

News and Views about Taxes

What I’m seeing this year

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We are now one month into tax season. I’ve seen about 60 clients already, a few more than at the same point last year (although the office overall is down). Here are some trends that I am seeing:

1. More companies are making tax documents available online earlier in the tax season. While this has been increasingly true of W-2s over the past few years, I’m seeing people coming in earlier with 1098s for their home mortgage interest and with brokerage statements/combined 1099s from their investment accounts, all of which were accessed and printed online. Usually I don’t start seeing the latter until closer to the end of February/beginning of March.

2. More people want to be made aware of developments that affect their taxes. For example, when I had to explain to clients that the IRS would not accept their returns until February 14 because they had deductions on Schedule A, the clients by and large not only knew that but in many cases knew why – and most of the ones who didn’t know the details really wanted to know them. With my repeat clients, I am spending more time, on average, than I did last year.

3. The effect of the loss of Refund Anticipation Loans (RALs) has not been all that big. I had only one client leave because the client couldn’t get a RAL from us, and our overall traffic, while down, isn’t down as much as we half anticipated. Most of the prior RAL clients I’ve seen were willing to wait the extra time. That’s encouraging.

4. More people are trying to do their taxes themselves rather than consulting a professional. The number of calls that I field from people with tax questions is going up – and the questions themselves are becoming more complex.

Now obviously, this is primarily about price; even the people who keep coming back year after year balk when the prices go up. But I think we are getting close to the point that what we provide in expertise and reduced noncompliance risk isn’t going to be enough to bridge the gap between what we charge and what people can get from doing it themselves – and I don’t see enough of us being creative in trying to bridge that gap. I think that going forward our key to long-term success as tax professionals is to figure out how we remake ourselves in this market.


Written by nctaxpro

February 15, 2011 at 1:28 pm

Posted in Taxes

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