Friday, February 28, 2014

How to Save a Billion Dollars on Taxes!

H&R Block Bahooey
It’s that time of year time. And along with tax time comes the barrage of advertisements about who you should pay to do your taxes.

And OMG I passionately hate the particularly annoying advertisement plastered everywhere: “Get Your Billion Back America.” H&R Block has been running these super cute, super slick, super fun ads that let you know if you don't use them, you won't get your portion back. Your portion of a billion dollars! Wow! Makes you feel left out, doesn't it?

Advertisements like these play right into people's fears that they are missing some important deduction, that if they don't use a professional (or as they call them, “Tax Pro”), they'll be paying more to the government, that the tax code is somehow set up for you to have to be "in the know" to get all of the right tax breaks, and that you probably aren't smart enough to do it yourself.

For the majority of Americans, this is a bunch of bahooey. If you are like most people, have a job with W2 income and own a home, your taxes are fairly simple. Should you pay someone to get your taxes done? Well, if you have room in your spending plan and don't want to do it yourself: yes. But will the H&R Blocks of the world get you a bigger tax refund than Turbo Tax will? No. Absolutely not.

Frankly, I think they should be ashamed of themselves.

There's an ethical code you learn when you become an accountant. You're here to help people, not play into their fears. You're supposed to teach them, not tell them they'll never know how to do their own taxes.

Now, if you own a business, have rental properties, or any other special circumstances, then my opinion on professional vs. Turbo Tax is different. The more special circumstances you have, the greater the likelihood that you should hire a professional. The more you have at risk, the likely it is a worthwhile expenditure. But if you fit into one of those categories, the national tax franchises aren't where I’d recommend going. You can read my “where to go” recommendations on Where Should I Go To Get My Taxes Done?

And, for those of you that who are on a limited income, and for whom paying a professional would be a hardship, research the programs that are out there to help you. The most well known one is VITA. You’re not going to get a hard sell there, like you do at the tax franchises. You’re just going to get some simple, straight forward, free assistance getting your tax return completed.

- Stacey Powell

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