Hello this is Jonathan Winter from Deductions.Tax. When I grew up my father said to me: “if you want any type of financial advice, whether it’s taxes, investments or budgeting, go to your accountant first.” That was sound advice because a good accountant is trained to see the bottom line in the most concrete, pragmatic way: no fluff, no spin, no grand vision – he (or she) leaves that up to others. He concluded with, “wealthy people are very pragmatic about money – most listen to their accountants, only a few listen to their stockbrokers…” It was then and there that I wanted to become a CPA.
So, I did…
When I passed the CPA exam in the mid 1990s, the internet was in its infancy stage. “Dial up” was the only way to connect to the “world wide web.” One could not make a call from their land line (back when there was such a thing, lol!) while surfing the net. We even learned to dial “*70” to disable call waiting so we wouldn’t accidentally get disconnected when our friends or relatives called us! Also during that time customers had to pay a lot of money for financial advice. Stock brokers were charging 2%+ of the value of their client’s portfolio every year – just to watch over their investments and CPA’s charged $500 for a simple return and $1000+ for an itemized filing. Moreover, all tax returns were filed by snail mail and we had to wait six to eight weeks for our tax refunds. There was no such thing as “electronic filing.”
But as with all things, as technology advanced, competition ensued and financial advice became cheaper. Enter tax firm accounting software which reduced “person hours” per tax return down significantly. Then, with the promise of “simplified taxes” on the horizon, the average person was destined to be able to do their own tax return in 15 minutes over a cup of coffee. There was just one problem with this: the tax code did not simplify as everyone said it would, it got worse! This threw the entire model of “simplification” out the window.
Today, we have a “Franken-Tax” system – bolting on tax change after tax change to an already complex problem. Currently there are over 5000 pages of tax code in the IRS’s tax manuals – many seemingly contradict each other. Add to that the very real possibility that as political parties gain and lose power the tax code will experience additional “bolt on fixes.”
Finally, there is a strong interplay between taxes and investments and financial planning. We would be remiss if we delinked the three as if they are completely independent of one another. They are not…
At Deductions.TAX we have significant resources to answer your financial questions. Some articles explain the newest tax deductions while others explain how to save for a home.
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Jonathan Winter, CPA, MBA