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Why really smart people have other people handle their taxes

If you’ve been following the 2016 presidential primary campaign, you may have heard that Donald Trump wants to put H&R Block out of business by simplifying the tax code. Good luck with that, Donald! Every presidential candidate and just about every other politician has tried to stand for a more fair and simplified tax system. Many of them have pandered to an electorate that continues to be frustrated by burdensome tax laws and complicated regulations that are almost impossible for them to figure out.

In reality, real tax reform based on simplification never happens and probably won’t any time soon. Why is that? Why, if so many people agree that we need a more simple tax code, do we continue to have more complex tax laws continuously pile up over time? The answer is because enacting laws that manipulate the tax code is the way to affect taxpayers’ behavior on a large scale. It’s the politicians’ key to power and leverage over the enforcement of their policies. Politicians use tax breaks to incentivize certain behaviors and tax increases & penalties to discourage other behaviors.

So, go ahead and work for tax reform if you think it’s needed, but in the meantime, you are best advised to work with a certified tax professional on something as complicated and as important to your business as taxation.

We’re thoroughly impressed with some of our clients’ thought leadership as it pertains to their respective industries. We’re fortunate to work with very smart people and have learned a few valuable things from them over the years. Being as brilliant as they are, you might assume they could figure out their own tax preparation, file themselves and avoid another business expense. After all, preparing your taxes is simply a matter of following directions properly and filling out forms, right? Well, like we said, these folks are smart; smart enough to delegate their tax work to those who specialize in taxation. They know that doing their own taxes is like self-dentistry – a really bad idea!

You need someone who knows exactly what they’re doing when it comes to dealing with the IRS and your state revenue department. An IRS Enrolled Agent (EA), for example, is an accountant registered with the Internal Revenue Service and legally certified to represent their clients before the IRS in all matters of taxation. IRS agents actually prefer dealing with EA’s due to their ability to understand the most current tax laws & regulations at the granular level. They can discover irregularities and resolve tax issues faster than their counterparts in most cases.

You probably wouldn’t trust yourself as an aircraft mechanic fixing the jets you fly on, nor would most people volunteer to perform needed surgery on their relatives. These highly specialized fields require years of formal training and ongoing continuous education. Managerial accounting and business taxation require similar levels of specialized education and training for practitioners to remain viable.

Gerlach Accounting LLC is passionate about the business of tax planning and support services for both individual and corporate clients. We welcome phone calls and online inquiries! 603-769-4087