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Tips On How To Choose A Tax Consultant

After a full recovery from the financial and physical activities of the holidays, professionals and businesses should prepare for April 15. It's tax season again and how one views this annual activity depends on one's stage in life and filing level. Those who are young and don't need to itemize, view this activity as nothing more than an obligation to the IRS. But once there is a change in marital status, property purchases, multiple sources of income, or additional dependents, then tax preparation and planning can be an enormous task to tackle. This activity can intimidate especially those who first-timers. With a good tax consultant or tax accountant, one can relax and not worry about those nitty-gritty details. The key here is having a good relationship with the tax consultant. With a bit of research, getting to the right certified public accountant (CPA) handling taxes as well can be easy.

Asking The Right Person

The first step is to ask from among friends and relatives who have some experience on this activity. Appearances are deceiving. Friends and relatives who appear prosperous are not necessarily the ones who have the best tax consultant. However, those who have several properties or own some business may have someone whom they count on to do their tax statements. These people obviously would recommend someone. Another source is asking a financial officer or a CPA in the workplace. They may have colleagues that do tax consulting. The last resort would be the Yellow Pages or make a search using the internet for firms that offer tax planning and preparation in the locality.

Deciding Which Tax Consultant

After making a shortlist for tax accountants, the next thing is to conduct research on the candidates. Make an appointment to visit their offices. This might be a tedious step but remember the tax consultant will be privy to highly confidential financial information. Before deciding which one, the experience and credentials of the chosen one should be established. Look for a person who a basic rapport can be established. It is easy to develop trust with someone that one feels comfortable with. Consider the following questions:

• Do they have a clean and orderly office? Will your documents be safe in their office?

• Do you feel comfortable with the tax consultant? Is he or she a person you would like to see several times a year?

• Do you perceive professionalism not only with the person you are dealing with but with the other staff in their office? If the answer is yes, then perhaps you can stop looking now.

Check Credentials

Just like when one is looking for an employee, getting a tax consultant or tax accountant should have some minimum requirements. Some recommended items to look for in the credentials:

• Degree in Accounting or Accountancy

• Certified state accountant

• Certification as an Accredited Tax Preparer (ATP) or Accredited Tax Advisor (ATA)

• A client listing containing years of service to the client is a validation of experience

A step further is to check with the National Society of Accountants. Membership in such an authority group is a sign of professionalism. The Better Business Bureau can also be a source of information to find out if there have been complaints on the person or firm.

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Do You Need a Tax Preparer or a Tax Consultant?

As tax season draws near, mostly everyone (I hope) is getting ready and setting appointments to get their tax returns prepared and filed. Good for you. With the speed and convenience of retail franchises like HR Block and Liberty Tax or even online free software, most people don't have to worry too much about where or how they will get their tax returns done before the filing deadline. But then, there are those that dread tax filing season because:

They have more than one source of making money like having a two income household; They operate a business; They make a lot of money; They have more than one type of income like wages from a job, income from a side business, retirement income, or even income from investments; They own either personal or business assets that they might have sold or gave away during the year So... what do these people do? Better yet, what's better: a tax preparer or tax consultant? Let's discuss... A Trusted Advisor Though most preparers are trustworthy, they're primarily available during tax season (January to April). For those that are working at retail tax franchises, they are working part-time hours and have limited accessibility beyond the time they are preparing taxes. Tax consultants are usually available all year because tax preparation and consulting is their full-time business. Another advantage of being available for the entire year is for you to consult with tax consultants on transactions that could cause you to pay too much or not enough in taxes.

Deep Knowledge of the Tax Code It's typically the norm for consultants to have a deep and thorough knowledge of the tax code. Most of them either have professional credentials such as Enrolled Agents (EA), Certified Public Accountants (CPA), or certifications obtained through accredited programs such as the National Tax Training School and other vocational institutions. Also, they have usually acquired many years of experience either working with clients or through past jobs related to tax prep or consulting. Why is this important? It's not to sound like a tax nerd and talk in lingo that's too hard for anyone to understand. Absolutely not. Unlike preparers (not all, but most), consultants rely on their knowledge of the code to offer strategic options for reducing your tax bill that's legal and fair. Also, this saves you time because they are often able to locate the reference needed in the code to take a certain deduction or exclusion without much effort or research.