In 2007 I had a very powerful conversation with John Hewitt founder of Jackson Hewitt and Liberty Tax Service. My question to Mr. Hewitt was simple “Why should I buy a tax franchise when everywhere you turn more and more people are choosing the online and or free e-file option?”. Mr. Hewitt responded by polling the room and asking how many people paid to change their oil. If you are reading this article I am sure there is a high probability you pay someone to change your oil even though you are more than capable to Do-it-Yourself. When I founded Mid Ohio Tax Service in 2008 my entry to market was to create a simple process so easy that no one would want to Do-it-Themselves. I have been teaching Taxation at community college for almost 5 years and have seen first hand why Do-it-Yourself may not be the best option. Besides the simple money that gets left on the table here are some truisms that come with Do-it-Yourself vs paid tax preparation:
- “I can file Turbo Tax online for free!” Truth: In Ohio Individuals are required to File Federal, State of Ohio, Ohio School District and Local City Tax Returns, these are not included in free.
- “I can buy TurboTax Deluxe or Tax Act for $75.00” Truth: Local Respected Tax Services and CPA offices with years of experience average fee for a simple Itemized Return is under $150.00.
- “I can do it at home” Truth: Going back to the oil change idea most people that prepare their taxes at home spend on average 6-8hrs, some even wait days to hit send for fear of error. Is this really good use of your time? The average client office visit is 1 hour.
If you do your own taxes its never a bad idea to have a professional check your work. Simple mistakes can cost you thousands of dollars in taxes. Before picking the Do-it-Yourself route weigh the alternatives of consulting with a professional and estimate how much you are actually saving by Do-it-Yourself. We pay to have our oil changed for the ease, cost savings and piece of mind. Should tax preparation be any different?