Dealing with tax issues and preparing an annual return can be straightforward for some individuals. But for many others, this process can be very complex, which has led to a huge increase in the number of tax preparation and consulting services available. But it is vital to understand that tax consultants do far more than prepare tax statements. They can provide many benefits to individuals and businesses working with them.
What are Tax Consultants?
Tax consultants may also be called tax advisors. Simply put, they are experts in tax laws, compliance issues, and planning. While they can help prepare taxes, they can also help businesses and individuals create short- and long-term strategies that minimize their tax liability and maximize deductions, allowing them to keep more of their money.
Tax consultants generally have more expertise and knowledge than most tax preparers. They stay current on all legal changes impacting tax planning, inheritance, charitable donations, and other complex tax issues. Most tax consultants have training and education in tax law or accounting. Some are CPAs. Tax consultants with a law degree may also represent clients in tax-related litigation.
Common tasks that tax consultants complete include:
- Preparing and filing tax returns. Consultants will collect appropriate information, such as income and expenses, to determine the correct taxes due. Once this is completed, the tax consultant will file a return with the appropriate regulatory body.
- Researching tax laws. Tax consultants stay current on the latest regulations by reading tax journals, attending industry seminars, and networking with other tax professionals. The time spent researching these laws can greatly benefit clients by ensuring compliance and that the correct taxes are paid.
- Identifying deductions that can reduce your tax burden. Missing deductions on your tax return can cost you big time, especially if you miss multiple deductions several years in a row. Tax consultants can help you ensure you are leveraging all applicable deductions and aren’t paying more than your fair share of taxes. In many instances, the money you save by optimizing these deductions can exceed the cost of working with a tax consultant.
- Minimize tax liabilities during retirement. It’s common to fear retirement since most individuals have to get by on a fixed income, with no extra room for unforeseen expenses. However, minimizing your tax liability during this stage of life can ensure that your retirement years are much more comfortable than they may otherwise be.
- Handle taxes on all income, including non-employment sources of income, like rental properties. With the rise in freelance work, multiple jobs, and other sources of income that many people now seek, completing your taxes can be much more complex than it has been traditionally. However, tax consultants know how to navigate all of these issues to ensure all income compliance, reducing your risk of an audit.
- Manage capital gains taxes. Certain life events can trigger a capital gains tax, and a failure to pay the right amount of taxes at that time can result in an unexpected and much larger tax liability later. You can reduce the risk of this scenario by working with a tax consultant.
- Address tax-related issues arising from major life events, such as death, births, marriage, and divorce. Depending on the life event and the structure of your family, any of these events can potentially complicate your taxes. Tax consultants know how to address these issues and handle tax-related matters appropriately.
- Represent clients during an audit. Of course, nobody ever wants to be audited, but sometimes it happens. Tax consultants can represent clients throughout the process, often reducing the time and money required.
- Help with tax planning. Tax consultants are experts at helping others minimize their tax liability. The guidance they can provide ensures you are taking advantage of all applicable deductions. They can also help you make investment choices that will minimize your tax burden in the future, allowing you to keep more of your hard-earned money.
As you can see, tax consulting services can assist with tax preparation in a number of ways. Most importantly, they help to ensure your tax filings are accurate and help you identify legal ways to reduce your tax burden. While many people believe that securing tax consulting services is cost-prohibitive, the reality is that working with these professionals can save you far more money in the long run. For more information about tax planning and tax consulting services, contact Parker Business Consulting today.
Parker Business Consulting & Accounting, P.C. is a unique firm with more than a combined 75 years of experience in private industry, coupled with a strong background in public accounting. This combination enables us to provide valuable assistance based on direct experience with many of our clients’ same issues.