Calling all accountants! Self-employed workers aged 18-24 could be your key to prosperity.
For self-employed individuals, getting a little help from an expert accountant can make filing taxes a lot easier. Just as teachers are the authority when it comes to education, CPAs are the authority on all things taxes. But who uses accountants today, and what purpose do you serve in the eyes of your clients?
In an effort to better understand how entrepreneurs interact with accountants and pay their taxes, we commissioned an independent survey of 500 self-employed workers ages 18 and up, in the US. What we found may be the key to helping you prioritize your client relationships in 2019.
Older and younger taxpayers use accountants differently
Would you believe self-employed workers aged 18-24 are more likely to use an accountant than those 55 and older? It’s true! While 28 percent of self-employed workers aged 18-24 rely on an accountant to do their taxes, the same can only be said for 21 percent of workers over the age of 54.
But these age groups also have different reasons for using an accountant. Fifty percent of self-employed taxpayers over the age of 55 view their accountant as an essential business advisor, while only 27 percent of those under 55 would say the same.
The biggest reason folks under 55 use an accountant, as opposed to just filing their taxes themselves? They don’t know how. In fact, 37 percent admit they’ve never done their taxes themselves and they never want to. Eighteen percent say doing it themselves is just a waste of time, while 17 percent claim they’ve tried and failed to do their own taxes in the past, prompting them to seek help.
With a new set of federal tax laws changing the game for everyone next year, there’s likely an even greater chance taxpayers will be relying on an accountant in 2019. That is, for those who’ve realized the tax reform took place. Out of our 500 survey respondents, 9 percent didn’t know there was a tax reform.
If they’re not using an accountant, what are they doing?
Overall, 32 percent of self-employed workers rely on an accountant to do their taxes, but that number begs the question: What about the remaining 68 percent?
As it turns out, the numbers are about even. Thirty-one percent of taxpayers say they’re doing their own taxes on paper, while the last third rely on a tax software like TurboTax.
Interestingly, younger self-employed workers are less inclined to use a tax software than their older counterparts. While 42 percent of self-employed workers aged 55 and over are most likely to file online or through another tax software option, only 33 percent of taxpayers aged 18-24 would say the same. Younger taxpayers are also more likely (but only by 1 percent) to file on paper. An interesting choice for the iGeneration.
Younger workers may be better for business
As an accountant, you should be heartened by these current trends. While you have yet to prove yourself an indispensable business resource in the eyes of young up-and-comers, your foot is well inside the door.
Many self-employed individuals aged 18-24 haven’t done their own taxes before, and they don’t want to start. Considering these young taxpayers are 23 percent more likely to be audited by the IRS than taxpayers 55 and older, they also have an incentive to invest in your services.
With this year’s tax season behind us, it’s a great time to look to the future. Continue to build a trusting relationship with your younger clients. They may not be your biggest customers yet, but soon enough, they could be.