I don't make the rules and neither do you. And we don't have to like the rules or agree with them. But we have no choice but to play by the rules. If you don't know the rules, you get owned.
Dealing with taxes is much like dealing with the weather. If you don't want your picnic to be ruined, if you don't want to get caught in a storm just as you leave for work, if you don't want to get stuck in a snow storm without a coat, you have to know what is in the weather forecast. Same with taxes.
The three major financial factors in our lives are:
- Taxes
- Inflation
- The cost of money (interest rates)
A good tax preparer, in order to be the most help to her clients, needs to understand all three. I mean really understand them. If you are surprised that I listed inflation as one of the three main factors, you are at a serious disadvantage and you have some serious catching up to do.
As you surely know, the United States is tens of trillions of dollars in debt, which it can never repay. NEVER. Our children are saddled with that debt either forever or until some ugly financial collapse wipes out the debt. We have a government which is growing at astronomical rates, devouring so much cash that the taxes it collects cannot pay the bills. So it must borrow money and print money, increase taxes and reduce deductions.
I say these things to underscore the point that we have a government which is DESPERATE for sources of cash. They are not political statements. They are statements of indisputable fact.
Taxes on the whole are only going to go up, up, up in the future. Even if the federal income tax on individuals is abolished (no way), there will still be corporate taxes, state income taxes and all kinds of other taxes that we can hardly imagine. Sales taxes will continue to get more complex and pervasive.
The people of the United States of America are going to need and demand competent, caring tax professionals to stand between them and the powerful and abusive tyranny of the Internal Revenue Service.
Believe it or not, when things get bad enough the government will want a piece of everyone's IRA or other retirement accounts and they'll make laws and regulations to make sure they get an increased share. Think that all ROTH IRA withdrawals are coming out tax free? Maybe for a while, but sooner or later the government will figure out a way to get another bite of it.
As a tax return preparer, you'll learn the rules. You'll learn some pretty inexpensive ways to keep up with the new laws being enacted that will impact you and your clients. You'll see a wide variety of situations and how they impact the taxpayers both positively and negatively.
When you look at someone's tax return you can learn a lot about that person. You learn to "read between the lines" and you see how different lifestyles, income sources and spending habits can either make or break a person financially. This can make you a very influential person in the financial life of your clients.
Because of the ever-increasing complexity of the tax laws and regulations, it is easier than ever to practice in a specialized niche market. Specialization is like an amplifier that multiplies your income and profits by increasing your fees by adding value to your services.
Take your role seriously, have a strategic plan, and your future is looking very bright indeed as a tax return preparer.
