A year ago, I had a young accounting firm reach out to me called Circle CPA. They had a wonderful business model where you pay whatever you feel is right for tax preparation services. This means you could even get your tax preparation services for free! While the model sounded great, and they had good individual experience prepping taxes, being a new company they didn’t have a long track record at the time. Given my fierce protection of The Physician Philosopher readers, I was a little uneasy putting them on the site 12 months ago.
Now a year later, Circle CPA has had outstanding success with its business. They maintain an awesome “pay what you want” model (seriously). Below you will see some of the questions that I sent to Circle CPA about their business in order to feel comfortable recommending them to you. Today that is published with their permission. My questions are in bold. Their answers follow.
If you are in need of tax preparation services this year, check out Circle CPA.
1. Tell us a little bit about Circle CPA. Who runs Circle CPA, and what are the credentials and experience of those who perform the tax preparation services?
Circle CPA is an online tax firm that uses expert accountants and a pay-what-you-model to give our clients more freedom to spend their money the way they want.
Circle CPA is run by Bradford and Catherine Fishback, a married couple.
Bradford is a CPA that has worked for both large and small firms in California and with his own firms, totaling twelve years of experience (as of 2020).
While Bradford is currently the sole CPA at Circle CPA, in the future, as the firm expands, we’ll have other CPAs (and only CPAs, not EAs or RTRPs or random seasonal employees), preparing returns.
2. When did Circle CPA start, and why did you start it?
While working at a traditional brick-and-mortar, local CPA firm, Bradford developed a distaste for the high rates being charged to clients (typically $400 minimum) for simple tax returns that took a half-hour or less to prepare. With the rise of modern technology eliminating unnecessary costs, he knew he could develop a better business model and decided to leave the company to start his own national online firm. His market testing and first payment schedule was a $100 flat fee for individual tax return preparation. After a few years operating with the $100 flat fee, Bradford briefly tested a form-based fee structure but disliked how the final price wasn’t known up-front.
Since his goal was to make tax prep simple and enjoyable, Bradford thought hard about a pricing model that would compensate appropriately, not feel complicated, and be unique to the individual and their tax characteristics. Circle CPA and its pay-what-you-want model was born in 2018.
We have been pleasantly surprised to find academic research that supports a pay-what-you-want fee, with a key factor being that future services are linked to the amount of payment for the current year.
As a firm, we really don’t like taxes, and want to open up the world of “CPA-prepared tax prep”, the highest standard, to as many people as possible.
3. Can people really pay Circle CPA “What they want”? What if they want to pay you zero dollars (or $1,000) for their tax preparation services?
Yes! It’s totally up to the client, and there are no hidden fees; in fact, we only ask for the fee after all services have been completed. If a client pays us nothing or an unreasonably low amount, we will not accept them back in future years. If a client pays us a high amount (relative to the complexity of their returns), they will gain high priority status in future years. As long as a client pays us a reasonable amount, we are happy to continue doing their taxes year after year.
4. How many of your clients for Tax Year 2018 were high-income earners (>$100,000)?
Around 95% of our clients earned $100,000 or more in 2018.
5. What value does Circle CPA provide that cannot be found at TurboTax or with a local CPA?
According to IRS data, people who prepare their own taxes are five times more likely to make a mistake on their tax return than when prepared by a professional accountant. This is in addition to missing out on deductions, credits, etc. that they don’t know about.
Circle CPA provides the same expertise as your neighborhood CPA, but at a lower cost. Since we don’t have traditional overhead costs, e.g. 12 months of fancy office rent, we can operate with much lower costs than a local CPA.
The most common reason keeping people from hiring a CPA is cost, and Circle CPA eliminates that roadblock completely.
6. Do you handle complicated tax situations, too? For example, what if someone is a partner in a corporation, has 1099 income, W-2 income, and also handles real estate investments?
Absolutely. We handle these types of individual returns all the time. We also prepare small businesses that have the following characteristics: under $250,000 in revenue and $250,000 in assets (S-corporations) and under $250,000 in revenue and $1,000,000 in assets (LLCs/partnerships).
7. How quickly do you respond to clients when they ask you questions? Are you available year-round?
We get back to clients within a few days, especially during busy season (Jan 15-Apr 15). Yes, we are available year-round. During potential vacation season (Jun-Aug and Nov-Dec), it may take up to one week.
8. Do you represent your clients if they get Audited by the IRS?
Yes, we handle audits for returns that we’ve completed and like our normal service, it’s pay-what-you-want. The same is true for amended returns.
9. Why should The Physician Philosopher readers use Circle CPA for their Tax Preparation Services?
You’ll gain time, money, and peace of mind. We’ll also work with you year-round to assist with the implementation of both simple and complex tax strategies to lower your taxes in future years.
We know physicians understand the value of specialized knowledge. In the same way doctors are the best source for medical help, CPAs are the best source for tax help.
10. Are your clients’ documents safe online?
Circle CPA is proud to partner with box.com to safely share documents online. Box adheres to the highest industry standards for security so our clients can share, access, and manage their content with confidence. As such, 70% of the Fortune 500 use Box. For a mouthful of technical jargon on the specific security measures Box uses, feel free to visit the FAQ page on our website. Rest assured, your documents are in safe hands.
I’ve used turbo tax for years, but their accountants couldn’t get my 8606 right for my Backdoor Roth IRA even after I talked to them live. In fact, I had to teach them how to do it! Circle CPA may be replacing them in the coming years given their experience with high-income earners. And they could perform your tax preparation services, too!
So, if you are in need of tax prep this year, don’t hesitate to reach out to Circle CPA. Just make sure you tell them that you heard about them from The Physician Philosopher.
Have you used Circle CPA? Are you considering making the switch? What questions do you have? Leave a comment below.