Thursday, June 21, 2018


Over the past week or so, it was announced that H&R Block is closing hundreds of locations as it prepares to file fewer tax returns this coming year following the passage of the Tax Cuts and Job Act. Now I’m sure you can imagine that I don’t often like speaking about the big tax return factories, and I won’t be able to completely hold my virtual tongue here as I discuss them, but I have to do so as  I find this to be interesting news.
First off, this is not completely surprising. The thinking is that more people will have less complicated tax returns because of the increased standard deduction. And yes, there are going to be more people who no longer will itemize their deductions, and their tax returns will become that much simpler. I believe, however, that if clients receive a higher level of service, they will not simply abandon their tax preparer.
If you feel your preparer is only putting the right things on the right lines of a tax return, then I can see why going it at it by yourself makes sense if you are anticipating having fewer lines to put numbers on. I, however, aim to give my tax clients more than this.
One of the best parts of tax season is making people aware of things we can use in their tax return that they were not even aware of. For it is one thing to be the person who can make sure you put all the right numbers on all the right lines, but it is much more gratifying to add in new numbers on new lines that can lead to a bigger refund.  And this is a dynamic that is not going to go away with a new set of tax rules.
I believe that my clients should leave with the confidence that they are filing a tax return that utilized the tax rules to their greatest possible advantage. For really, if someone misses something on a tax return it’s usually not unreported income, but deductions that are not being used (at least if it’s all done ethically and legally). These things are missed because tax law is complicated. It was complicated before, and it is still complicated now.
So even though many tax returns will become simpler under the new rules, don’t you still want to file a return that reflects the best possible situation for you? Even if you only end up taking the standard deduction and there is little else needed to report on your return, is there not comfort in knowing that was your best possible choice?
I mean, we are months after the passage of the TCJA, and the IRS is still releasing notices advising on how many of the rules will be applied. If they are taking this long to figure things out, can it really be that simple?
And sure, my view on this is far from unbiased. I trust, however, that the level of service I provide to my clients will lead them to agree, and we will remain committed to getting through the new law together.

No comments:

Post a Comment