Video

Tax Planning Vs. Tax Preparation: Which is Right For You?

Accountants across the nation do tax preparation, but why are most of them not doing tax planning? 

It’s commonly known that tax prep is the process of preparing, calculating, and filing income tax returns on behalf of individuals and businesses. And while it’s necessary, it’s ultimately considered an expense to the client. 

In contrast, tax planning is looking at a person’s life, business, and regulatory requirements to legally reduce taxes using multiple strategies and entity structures that often result in significant savings.  

This makes tax planning one of the best ways firm owners can provide high value to their clients—standing in direct contrast to tax preparation, which is seen as a commodity as competition drives the price down for this basic service. Firms profit very little from tax preparation because too much time is spent on service delivery. The end result is that tax prep is a low-margin service where accountants typically charge under $1,000 per return. 

Tax planning, on the other hand, can be done more profitably. The market rate for this high-margin service is between $2,500 and $9,800 per plan. This makes it a great time to go beyond just tax prep and start tax planning today. Right now there is a high-demand for tax planning because  most accountants don’t offer it as a service. They see it as too complex and time consuming, but with a game-changing tax planning software now available, it’s never been easier to get started.

Jim is an accounting firm owner who didn’t have a background in tax planning. He felt intimidated to even begin offering this new advisory service, believing it would be too much of a time commitment. 

To his surprise, Jim found that tax planning software allowed him to easily see how various tax planning strategies were calculated across multiple entities and years. 

He could click into a specific strategy to learn more, and he soon was creating custom, professional tax plans for both new and existing clients.    

Firms that go beyond tax prep and start tax planning are often able to save clients more money and charge higher fees. 

And Corvee Tax Planning Software can help you streamline the entire tax planning process.

Learn more about how tax planning can be beneficial for your firm at Corvee.com

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Win a Free 1-Year Subscription to Corvee Tax Planning Software. To become eligible, schedule a demo before March 31.

Win a Free 1-Year Subscription to Corvee Tax Planning Software. To become eligible, schedule a demo before March 31.