This time when you meet with your accountant, understand your tax filings with this simple formula.
Every once in awhile, we actually lose clients, and even rarer do we lose a client over something that comes out of left field. Today was one of those days. I thought I’d share the story with you along with a quick thought about it.
Here’s an actual-true-life-extraordinary-and-peculiar story.
Ok, buckle up and please comment below if this has ever happened to you or you’ve had a similar experience. We’re still trying to figure this one out.
The client came in to drop off his tax documents. He met with one of our team members in the conference room. If a client wants to drop off taxes, we’ll look over the tax docs and make sure we don’t have any questions. Then we chat about what the client has going on, how they feel last year went, ask about any changes that might happen this year, etc.
As a firm, we love the new age of paperless. We aren’t tree huggers or anything radical like that, we just simply like having things in electronic format. It makes things more efficient. So we always convert whatever the client gives us into electronic format for our electronic filing system. We told the client he can leave his documents with us and we can mail them back to him or he can pick them up when we are done with the return, or we could just scan them right then.
His response was, “That doesn’t seem right. For what I’m paying you this seems suspicious. I’m not going to use you this year.” He gathered his things and left. We have lost him as a client. Keep in mind, he has been a client for a few years. (We even have an electronic copy of his tax docs from last year.)
Don’t make the same mistake this guy did. Because he had zero clue and zero desire to ask or find out why we keep copies of his tax docs, he is now going to overpay in taxes this year when he files for himself or gets someone else to file for him who apparently is not going to be able to look at his tax docs.
A paid professional MUST keep a copy of the documents used in preparing the return. If we don’t have proof of why we put the numbers in its specific locations on the tax return, we can have some severe consequences. Without supporting evidence, we look like we just made up numbers. CPAs go to jail for things like that. Not to mention losing their license. I can tell you my wife and kids would not be happy with me if I lost my ability to earn an income.
Now, are you ready for the formula you can use.
Understand your tax filings by doing one simple thing…. ASKING!
Hey, why are you doing it this way? What is the purpose of using this method? Etc…
We try our best to make sure our clients know why we prepare the returns the way we do and why we like certain strategies. We want them to understand as much as they want about what we are doing. If you find yourself in a situation where you don’t know why someone is doing something (like scanning tax docs to prepare a tax return), ask. Give the other person a chance to explain. “Seek first to understand” is one of the 7 habits of highly effective people .
So, you’ll start asking more to understand your tax filings and the questions you have.
