Tax Pros, Your Value Is Your Knowledge: What the Latest Filing Season Data Is Telling Us

The tax industry is changing.

Technology continues to evolve. Taxpayers have more information available at their fingertips. Online tax preparation options continue to grow, and more taxpayers are becoming comfortable preparing their own returns.

But does that mean there is no longer a place for professional tax preparers?

Absolutely not.

It does mean, however, that tax professionals need to become very clear about the value we bring to the table.

And that value cannot simply be knowing how to enter numbers into tax software.

Self-Prepared Returns Continue to Grow

Recent IRS filing season statistics provide an interesting look at what's happening in our industry.

Professionally prepared e-filed returns continue to represent a significant portion of returns filed.

At the same time, self-prepared e-filed returns are growing at a faster rate.

That is something tax professionals should pay attention to.

It doesn't necessarily mean taxpayers don't value professional assistance.

It means taxpayers have more choices.

They have access to tax software.

They have access to online filing platforms.

They can search for tax information themselves.

They can visit IRS.gov.

They can even use artificial intelligence to ask basic tax questions.

Twenty years ago, access to tax information looked very different.

Today, information is everywhere.

So the question becomes:

Why should a taxpayer choose you?

Knowing How to Use Tax Software Is No Longer Enough

Tax software is an important tool.

But software should never be confused with tax knowledge.

Your software may calculate a credit, but can you explain why the taxpayer qualifies?

Can you recognize when the information a client gives you doesn't make sense?

Can you identify when additional questions should be asked?

Can you explain why a taxpayer qualifies—or does not qualify—for a particular filing status?

Can you recognize a potential compliance issue before the return is transmitted?

Can you help a client understand the tax consequences of a business decision before they make it?

That is where professional knowledge becomes valuable.

Tax professionals should know more than which box to check.

We need to understand what is happening behind that box.

Taxpayers Are Becoming More Informed

Another important trend is the amount of tax information consumers can access themselves.

That changes the client relationship.

Today's taxpayer may walk into your office after already researching their situation online.

They may have watched videos.

They may have read articles.

They may have asked questions in social media groups.

They may have searched IRS.gov.

Sometimes the information they find will be correct.

Sometimes it won't.

Either way, your role as the tax professional becomes even more important.

Your client doesn't simply need another source of information.

They need someone who knows how to evaluate the information and apply the tax law to their specific facts and circumstances.

Technology Is Not the Enemy

I don't believe tax professionals should be afraid of technology.

We should learn how to use it.

Technology can make our businesses more efficient.

Automation can improve client communication.

Digital systems can improve workflows.

Artificial intelligence can assist with research and productivity when used appropriately.

But none of these tools eliminates the need for professional judgment.

Technology should support your knowledge—not replace it.

The tax professionals who understand this will have an advantage as our industry continues to evolve.

Give Clients a Reason to Choose a Professional

If your only message to potential clients is:

“I can prepare your tax return.”

You are competing with every tax preparation software program available.

Your value proposition needs to go deeper.

Maybe your value is your knowledge of small-business taxation.

Maybe it's your understanding of complex family situations.

Maybe it's tax planning.

Maybe it's representation.

Maybe it's compliance.

Maybe it's helping entrepreneurs understand the tax consequences of their decisions throughout the year.

Maybe it's simply having the experience to recognize when something doesn't look right.

Whatever your specialty is, develop it.

Because taxpayers can find software anywhere.

Expertise is different.

Never Stop Educating Yourself

This is why I continuously encourage tax professionals to invest in education.

Learn the tax law.

Learn compliance.

Learn Due Diligence.

Understand what's being filed under your EFIN.

Learn how to research tax questions instead of relying solely on what someone said online.

Learn how to operate a real tax business.

Train your team.

Improve your systems.

And continue developing your professional judgment.

The tax industry isn't disappearing.

It's evolving.

The question isn't whether technology will continue changing our industry.

It will.

The question is whether you will continue evolving with it.

Your software isn't your greatest competitive advantage.

Your CRM isn't your greatest competitive advantage.

Your automation isn't your greatest competitive advantage.

Your knowledge is.

Keep learning.

Keep growing.

And make sure the value you bring to your clients is something technology alone cannot replace.

— Dr. Gwennetta WrightXpert Business Solution

For more tax-business education, resources, and professional development, visit Xpert Business Solution.

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