A tax adviser is sometimes also known as a tax consultant. A tax advisor is a person who has advanced training, knowledge, and specialization in tax law. The U.S tax code in its entirety amounts nearly to 3.7 million words and so when it comes to preparing tax returns, we should either have ample knowledge ourselves or we have the option to hire the services of a tax specialist.
When it comes to tax advisors there are a few different classes of these professionals. Let’s take a look at the two main classes.
1. Enrolled Agents
Enrolled agents are federally licensed after they go through a rigorous test and meet the annual industry regulatory requirements. They have to go through the same process every year to maintain their professional status. These agents are approved to present clients before the IRS, they are also licensed to provide to general consumer and businesses tax services.
2. Certified Public Accountant
A certified public accountant shares nearly all aspects of an enrolled agent with one distinct addition. Certified Public Accountants (CPA) are licensed by the state in which they choose to work. In order to get certified they need to complete 150 hours of undergraduate or graduate study. They also have to clear a CPA test at the end, taken by the American Institute of CPA’s.
CPA’s have the choice to either work in their own office or to join a large corporation. They also have the option to become a certified financial planner.
CPA’s charge with respect to completed tax returns or on service by service basis.
Why Hire A Tax A Tax Advisor?
The most important reason for hiring the services of a tax advisor is that they can save you thousands of dollars. If you own a company they can help you with company tax planning while also making sure to reduce corporation tax for your company.
On the other hand, if you have a complicated tax life with factors such as:
- Retirement saving accounts
- Real estate transactions
- Trust funds
- Stock Options
- Self-employment income
- A home office
- Income from rental properties
- So on and so forth
Then should definitely go for a tax advisor to make your life easy and save some money while doing so. It is also a good option to consult tax specialists when you’re going through major life events like adoption, divorce, inheritance, and events of the same magnitude. There are a lot of major events which can be taken care of in a much better and faster way with the help of a tax specialist.
Why Hire Someone With Experience?
The market is full of freshly minted certified advisers but make sure you make “Experience” your first priority when looking for a consultant.
Getting someone who has experience in defending cases in front of IRS will always have its perks.
There is no specific amount of time after which a professional can be called experienced, so make sure you look for the right qualities that you want. If the adviser has enough of those qualities along with the experience to prove them then he or she is the right person for you.
Make Sure To Clear The Fee Structure In Advance
A tax advisor normally charges on a sliding scale, the more work there is to do the more he will charge. Some consultant might charge a fixed amount for all the services while others would charge you by the hour.
In case of a financial planner, the charges might be according to the assets at play. So make sure you clear the fee structure before you go ahead with a tax advisor.
Make sure you realize that fact that tax professionals are not for the rich only. If you have retirement savings, a home with a family, you file income taxes then you will too benefit from the help of a professional tax advisor.
By Emily David
who has been associated with Biznavca for the past couple of years; she has been providing tips and advice to people looking to Tax adviser, Tax Planning. Chartered certified accountants. Apart from that Emily also writes about various topics related to finance, accounting, Bookkeeping, Payroll services.