Here is a common misconception: if a task is simple, it isn’t valuable. Don’t take this misconception lightly, as it can have huge implications regarding how you promote your business and the value you create.
Pricing and effort are often (but not always) aligned. A painter, for instance, will charge a lot more to paint your entire house than a single room. That’s reasonable. But experts are compensated for the value they create, not the time they put in.
Imagine you walk off the tennis court after playing a disastrous set. A woman approaches you with a proposition. “I could fix your backhand with a quick lesson,” she says. Thirty minutes and $50 later, you have a remarkably improved tennis game.
The task of providing you with a few pointers is a relatively simple one. But you consider this money well spent. In the first place, your tennis instructor is an expert who has built up considerable knowledge over several years. Simple or not, improving your backhand is not a task that many people could do.
Even beyond that, spending $50 for a lifetime of better backhands is a tradeoff you will happily make. You aren’t thinking for a second about the effort your coach put in. All you care about is the lifetime value you have just received.
Here’s a parallel to our world: as tax codes go, Section 139 is relatively simple. But change your mindset. The amount of time it takes you is irrelevant. The degree of difficulty is irrelevant. The tax savings (and the value to your clients) are enormous! Let your clients pay you for your expertise and for the value you create.
With that in mind, consider changing your mindset. When you’re focused on value planning or value pricing, it doesn’t matter how long something takes. That’s not where your value is created.
With that in mind, I propose you follow a simple three-step plan to identify candidates who can benefit from Section 139…
Step 1: Brainstorm 3 people you know who can benefit from a Section 139 Plan
Step 2: Review their effective tax rate and estimate (or guess) how much they can save
Step 3: Call each client from Step 1 and use savings from Step 2 to fill in
And if you’re not intimately familiar with your client’s specific expenses, then use placeholders and come up with a general list. We know health care can be a qualifying expense, as can sanitizing their home, daycare, tutoring, etc.
With just a little research, imagine a pitch like the following…
Listen, Roxanne, I spent some time with your file and there are some special provisions because of COVID that I think could save you about $5,000 in tax. In fact, that check that you’re supposed to send in before New Year’s, you can take five thousand dollars off that if we do this level of planning. I just wanted to know from you, is this something you want me to do? Do you want me to put this together for you or not?
Click Here to find out more about Value Pricing and how to become a Certified Tax Planner.
