Tax Planning

5 tricks to get prospects billed extra for tax planning

What is the accounting profession’s greatest tragedy? It is the fact that most small business owners and individuals believe that their accountant will save them tax money, while the truth of the matter is that the majority of accountants never reduce anyone else’s tax bill. For the few accountants trying to save their clients money, most don’t know how to communicate the value they create for their clients in such a way that they can bill for that service.

If you want a strategy that will help you build a successful, rapidly growing, and profitable business that aims to save customers millions of dollars each year, then tax planning as a service is the place for you. When done right, fees can be five to seven times higher than tax preparation and the value to the customer can be exponentially greater.

Before we get into pricing and packaging, let’s briefly review the purpose of a tax plan, which is to fully analyze a customer’s life and business and get them into better shape by paying less tax. For many accountants, the tax code is too complex to understand all of the options – but you don’t need to know each and every tax strategy to get started selling tax plans. Even if a company can save a customer three to five times what they’re paying for a tax plan, they’re still better off than without.

In fact, at a recent Tax Planner Roundtable, attendees found that they typically only need four or five strategies to create a great tax plan for a typical client. One of the most popular of these tax planning strategies is entity optimization, which is the process of determining whether the customer is organized into the best business structure. Approximately 75% of small businesses are organized under Schedule C. But it rarely makes sense for a business owner to stay on a Schedule C. By moving to an S corporation, partnership, LLC, or even C corporation, accountants will often be able to minimize their taxes significantly.

Below are five ideas of what other successful companies are doing right now and what your company can do. The most important point to remember is that tax preparation in and of itself is not very profitable. For this reason, tax planning should be included in the range of services of every successful law firm and ideally bundled with one or more other services. Taken together, these proven packaging strategies can not only help you increase prices, but also create value for your customers.

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