Acquiring the services of a professional tax advisor can seem like a luxury, especially to small businesses, startups, and individuals. At first glance, it’s hard to justify the expense when your income still has still has to stretch in so many other directions. Plus, finding the right financial professional to fit your needs can be its own challenge. You may be wondering, should I hire a CPA, an accountant, or a tax advisor? Is there even a difference? Well, we’re glad you asked.
Who is a tax advisor?
A tax advisor, or tax lawyer, is an individual with specialized knowledge and training in tax law. People and businesses will usually retain a tax advisor’s services to help them minimize their tax liability while staying within the law. This is especially true when dealing with somewhat complex financial circumstances.
There are two types of tax advisors: the non-tax attorneys and the lawyers who specialize in tax laws. Such specialists in tax law can help you reduce your tax liability through proper representation and a deep understanding of the tax laws.
The tax advisor, or any other professional working with tax laws on behalf of the taxpaying public, needs to be proficient in the field of taxes and be a specialist in their particular area. In addition to knowing the tax system in and out and being highly qualified, they typically need to hold a license from the appropriate state bodies to practice their profession.
Understanding how a professional tax advisor works
There have been many changes to the world of work, and thus the world of taxes, in the recent past. Therefore, a great tax advisor won’t just have a thorough understanding of the laws and regulations. He’ll be keeping up-to-date with evolving practices in the fields of taxation, as well as the rules applicable to the taxpayers in different jurisdictions.
Your tax advisor should:
- Be familiar with the procedures and methods employed in collecting and auditing taxes, and understand their scope of application
- Advise you on the tax issues and pitfalls that affect you specifically during tax planning
- Formulate a suitable tax preparation strategy that respects the current tax laws and practices
- Communicate effectively with you and employ all modern resources at their disposal
- Negotiate tax liabilities efficiently with the IRS for quicker resolution
- Guide you in getting out of tax difficulties as needed.
They’re even able to contact you as the client and collect the money in case of failure to pay the tax due.
Hiring the right tax advisor for your financial needs
There are no shortcuts to success. It takes work and diligence to find and hire an experienced tax advisor that’s right for you. You should always be careful when selecting a professional to look after your taxes.
The first thing to remember when hiring a tax professional is that they are there to get the maximum benefit out of every case of tax liability. The ideal professional would not hesitate to use all legal means necessary to come out with a good deal for you as their client. A professional tax advisor will never ask for extra payment from you outside of their fee, or ask you to pay them back.
Always search for a tax strategist, that is someone who is looking at your situation holistically and isn’t afraid to go above and beyond for you. Experience is key, as novice advisors will find it difficult to deal with complex financial matters or negotiate with the IRS on your behalf.
Keep in mind that this person is working on behalf of you for the benefit of you. Any wrong information or missteps can be grave and costly, it will affect your overall performance. Thus, you need to find someone you can trust to take care of your taxes.
It is important that you discuss your financial position and all the relevant tax-related issues before hiring a tax professional.
A good way to find this out risk-free is by choosing tax advisors who’ll offer you a free initial consultation. Typically, you can contact a professional tax advisor online through their website or directly using a phone number or email.