DIY = Business Mistake? Hire a CPA!

Hey, guys! This is Justin Goodbread with Financially Simple. I’m holding two books that we’re going to talk about these. I want to use them to illustrate one of the biggest mistakes I see business owners make.

So what do I have? Let’s talk about this book first. This the manual to my 2007 Nissan Murano. So that’s how much of this book, not much, about 2 pages which are dedicated to oil changes. If I go down to Walmart just down the road here and bought the five quarts of oil and an oil filter, it’s going to cost about $13.43. Not bad. I do have the option though to go to like a Jiffy Lube and they’re going to charge me about $45. Yeah, they’re going to do some extra little things, but for the most part, an oil change will be $45. If instead of going to Jiffy Lube I changed the oil myself, and I would have saved about $125 over the course of a year. Not bad.

But we’re only dealing with two pages of this entire book. What happens if I have problems with my transmission? Well, I could go down to the local auto parts store and I could get a book which describes to me exactly what I need to do to totally redo to rebuild the transmission of my car. I could do that. I would spend probably $30, $40, $50 bucks for that program. Do I think I could yield the same results as the transmission shop? No way! Every time I touch a wrench, something bad happens. So what do I do? Whenever my car has issues, I take it to people that deal with it every day. But I know I will pay a more money and I’m counting on them their experience and knowledge to give me back a product which is going to be better than I can do myself.

Alright, what’s this other book? This is the 2017 tax code. That’s huge! I cannot tell you how many times we take on a new client or even current clients say, “I’m going to do my taxes myself.” We’re not willing to work on our car yourself, but we’re willing to work on the tax code yourself. 

We’re not willing to work on our car yourself, but we’re willing to work on the tax code yourself. That makes absolutely no sense to me. We go out typically and say we’re going to use, utilize this program for $20, $30, or free even. And they’re going to give our taxes back to us and they’re going to do a good job. And maybe they do.

It’s been my experience, that if you hire a good CPA, who knows this. And he works in this every day. That CPA is worth their weight in gold.

ACPA has been trained on how to help minimize your taxes through depreciation and deductions. Things that often the software programs won’t pick up. Give you a case and point. I had a client this last week we met with. We took him on about a year ago and when we began working together, they were doing their own taxes. I said, “Well why are we paying the taxes yourself?” He said, “Oh every time I take it to a CPA, they just get my documents and they throw it into this ole turbo-tax system or some other system out there and I end up, I could’ve done it myself and got the same results. “Oh ok, really?” “Yeah, yeah, that’s the case.” Alright, so I said, “You know, I can see some errors here. Some things you missed.” “Well, I used,” and they named a very popular tax preparation software. I said, “I understand that, but I see a couple errors here.” This year we asked him, “I’m imploring you, I begging you, please use a CPA this year. I’m not a CPA. I’m a CFP, a little different. I don’t deal with taxes in that reporting issue on a daily basis. Just like the transmission guys gonna charge us some money, the CPA is gonna charge us some money, but let’s just try this.”

Fast forward a year and here they come into the office this week, “Justin you won’t believe this. The CPA charged us $400.” I went, “Ok. Was it worth it?” “Oh yeah, it was worth it, they got us back four times the amount of money than I’ve been able to get back myself.” Of course, they did. They work in this codebook day and day out. They are the expert of the “transmission world”. They’re the people who know what is right and what is wrong in order for you to maximize your depreciation and deductions. We hire professionals to do it with this, but we don’t do it with this? If you work with a good CFP and a CPA together with a tax attorney, if you’re dealing with some other crazy things, each thinks differently.

So my advice, today the biggest mistake I see business owners making is they don’t hire a CPA. Look, people, it’s tax time. Hire a CPA! Don’t do it yourself! You need to hire a CPA!

This is Justin Goodbread with Financially Simple. Hey look, let’s continue to make our life financially simple.