Friday, March 30, 2012

How an Accountant Helps Us Achieve Frugality

Outsourcing is usually not associated with frugality.  In today's world it seems that "frugal" is associated only with the "do it yourself" movement.  From making your own yogurt to backyard chickens to home repair, frugal people are taking on all sorts of tasks.  Unless of course you live in our frugal household.

A few years ago I convinced my husband to outsource our taxes.  I married an electrical engineer.  To say he is good with numbers is an understatement.  He was on a math team, and dreams of coaching our kids when they are old enough for math team. I am not kidding. So, to turn over all of our finances and the math behind it to an accountant was not easy.  But we made the switch.

In a year when I am looking at every expenditure closely, I was skeptical if the CPA fee would be worth it.  The papers are done, the balances owed determined (we are both self-employed), and our accountant gave great advice.  Advice that will save us thousands in the year to come.  And his counsel was not something we would have received on Turbo Tax, which we used up until the switch.

What was the wonder he pulled off?  Advising my husband to elect to be taxed as an S-Corp.  You probably don't want the specifics, unless you have trouble sleeping......Essentially it reduces taxes by splitting off wages from bonuses.  If you are self-employed it is probably worth asking your accountant about.

Frugality doesn't mean you have to do everything yourself.  In my world it means wisely spending your money as well as your time.  By using an accountant we received information not available on turbo tax and freed up substantial hours of time it would have taken us to do the returns.  He was far more efficient, and we had that time to devote to our careers, health, or family.  If you are looking for ways to be more frugal, figure out what you earn per hour.  Then see if you can outsource tasks you don't really enjoy for less.  Use the time you save to work, and its a frugal result.

No comments:

Post a Comment