Why the Traditional CPA Model Is Broken | The “$46K Mistake” Business Owners Make

Hey there Entrepreneurs, TODAY I want to talk about 2 major complaints we constantly hear from business owners about their tax services: 

“THE FIRST - IS that They’re NOT very responsive, especially at tax time and the SECOND is - I feel like I’m paying too much in tax and that there’s more I could be doing to lower my tax bill”

Does this Sound familiar? Well it’s because it’s a common frustration with the Tax Profession.  The irony though…. Is that we really can’t blame the CPA or tax professional.  It’s not their fault - they’re doing the best they can to make a living using a model that’s been around for a long time. 

What’s both to blame and needs a change is the traditional Tax Profession services model.

Let me break it down…. The typical model is to charge one fee once a year for the tax prep and nominal planning efforts - mostly with a compliance focus…. AND if a tax professional is largely being paid only at tax time, they have to fit in a lot of returns during that short period, for the model to work. Hence the “I can never get a hold of them” becomes a real issue.  On top of that, the amount they are charging for each return is not enough to spread over a year of high touch individualized tax planning either.   

Now the common response to this is….”I can’t afford to pay a tax professional year round”, BUT what I’m here to show you is why you can’t afford not to.

Let’s use a simple example to illustrate….

Let’s say you own a small, but profitable company making $500K a year. [write on white board]

Let’s talk about scenario #2, What if I told you that you could get that same year tax bill down to $50,000 through effective and ethical tax planning working with a tax strategist?  How much would that be worth it to you?

Let’s talk about how this becomes a reality with VISIBILITY’s Tax Planning Service…..FIRST - it’s important to call out….- The time and attention needed to tax plan typically requires more of an investment, but REMEMBER no one makes an investment unless there are higher returns….so let’s break down the math. 

For purposes of our example, let’s say our services would be roughly $2-3K/month, or $30K for the year to have a regular recurring high touch focus on planning/implementing strategies to lower your tax bill? I get it–it’s still $30K!… but when you net the $30k with the reduced tax bill of $75k, you come out ahead by $46,000 [write on board], 

NOw we all know that everything in life is relative and to know the savings and understand the value you almost have to go through the pain of the higher paying tax scenario where you don’t get a lot of  year-round attention from your tax preparer.  

BUT remember, in one scenario you’re paying $126,000 ($125K in tax and $1K in prep fee) - you have minimal interaction with your preparer and minimal discussion on what can be done throughout the year to reduce your tax bill….. 

And In the second second scenario, you’re implementing a plan to reduce your bill by $75K and the fee, while higher at roughly $30K, allows for the attention and focus on customizing a plan to ethically lower your tax bill, still saving, in this case, around $46K.  

And again, instead of silence or non-responsiveness or whatever your complaint may be, you actually get:

• Real-time strategy

• Ongoing communication

• Monthly planning under a tax lens

• Year-round optimization for your business and personal net worth

So more service for less money at the end of the day. The math makes the problem a no-brainer.

And not only is that $46k, money that you can keep in your business, but yearly tax planning allows us to find tax strategies that align with your operating plan and allow you to reinvest in your growth and net worth, not just a random grab bag at the end of the year.  

Tax strategy isn’t about squeezing in one more deduction.

It’s about building a long-term plan that protects profit, reduces waste, and strengthens your ability to grow.

The system may be broken but business owners don’t have to stay stuck in it. If you currently have a tax professional that is actively tax planning and providing the attention your business needs, then by all means hold tight to your professional and thank him/her for their great service.  

But if this is not the case and you are interested in learning more about how we might be able to help you in your specific situation, click the link below and book a call with us today.

Let us help you stop guessing and start seeing clearly.  Let’s do this.