How to Find a Tax Advisor: A Comprehensive Guide
Need help with your taxes? Discover how to find the right tax advisor to save money and avoid costly mistakes with this step-by-step guide.
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The Atlantic recently noted that most Americans care deeply about building wealth. 79% of them describe their money as “extremely” or “very” important. If you share the same belief, an important step in putting your finances in order is finding a tax advisor to help you save as much as possible when filing returns.
For individuals seeking comprehensive tax advisory and preparation services, our Tax Advisory and Preparation page offers detailed information on how we can assist you.
But how do you choose the right professional with proven expertise? How do you ensure they can meet your needs? Here is a comprehensive guide on how to find a tax advisor. Keep reading to learn more.
How to Find a Tax Advisor
1. Assess Your Tax Needs
- Determine the complexity of your tax situation
- Identify specific services needed (planning, preparation, audit support)
2. Verify Credentials
- Ensure a valid Preparer Tax Identification Number (PTIN)
- Look for designations: CPA, EA, Tax Attorney
3. Evaluate Experience and Services
- Ask about experience with similar tax situations
- Confirm year-round availability
- Check for additional services (financial planning, bookkeeping)
4. Ask Pertinent Questions
- Approach to tax preparation and planning
- Knowledge of current tax laws
- Fees and billing practices
5. Make an Informed Decision
- Compare multiple advisors
- Consider communication style and trust
Understanding the Role and Benefits of a Tax Advisor
A tax advisor is a knowledgeable professional with in-depth financial expertise to assist individuals and businesses minimize tax liabilities. The expert can help you maximize overlooked tax deductions and navigate complex taxation laws at federal and local levels.
In addition to preventing costly mistakes that can trigger random IRS audits, taxation experts can provide strategic guidance for long-term tax planning, ensuring you achieve your ambitious financial goals.
Discover the 6 Benefits of Tax Planning for Your Business to understand how proactive strategies can lead to significant financial advantages.
Steps to Find a Qualified Tax Advisor
While finding a tax advisor might seem cumbersome for first-timers, look at it as a smart investment that will save you from overpaying the IRS or facing penalties that carry hefty fines, and sometimes, prison terms. That said, here is how to find a professional tax advisor in four easy steps:
Step 1: Identify Your Tax Needs
Identify your tax needs to clarify the type or level of assistance you need from the taxation expert. For instance, are you an individual or business client? If it’s individual, you might want to specify whether it’s standard annual filing, self-employed income, or personal investment. Businesses might require help with payroll and employee deductions.
Beyond individual and business tax professionals, you might also need experts who specialize in specific areas. These include estate planning, IRS disputes, and international filings.
Explore our specialized services in Estate Tax Portability and Foreign Tax Compliance to address these specific needs.
Step 2: Seek Recommendations
Consider direct recommendations, preferably word-of-mouth referrals. Word-of-mouth recommendations generate trustworthy leads for over 92% of consumers, including those in the financial sector.
These recommendations can come from family, friends, or colleagues. Alternatively, you can reach out to other professionals who might know reliable taxation experts. These include lawyers, bankers, accountants, wealth planners and other tax professionals.
For guidance on selecting the right CPA, consider reading our article on Top Questions to Ask When Selecting a CPA in The Woodlands.
Step 3: Verify Credentials and Experience
It will help if you confirm the credentials and experience of the viable candidates that you’ve shortlisted. All taxation experts are not the same, and you must do your due diligence if you’re going to find a tax advisor who can meet all your needs.
Check the candidate’s experience with past clients, especially those in similar situations to yours. Alternatively, you can check various qualifications that vouch for their expertise. For example a CPA certification indicates the professional is licensed to handle complex tax matters.
You can also check if the professional is an IRS-authorized Enrolled Agent or a specialized tax attorney. The latter has experience in handling legal dispute resolutions and advanced estate planning.
Step 4: Conduct Interviews
Meet with the shortlisted candidates to find the tax advisor who checks all your boxes. The interviews can be held online or in person, depending on the type of consultation each professional offers. During the interview, ask pertinent questions that will help you gauge the quality of the expert’s services. At the same time, find out about the fees or billing system to ensure the model matches your budget.
Key Qualities to Look for in a Tax Advisor
Now that you understand how to find a good tax advisor, which other qualities should you watch out for in an expert? For starters, hiring a tax professional goes beyond verifying their technical skills and academic qualifications. It will help if you consider a set of other qualities, including:
Step 1: Communication Skills
You want a professional who explains everything in a layman’s language. Jargon-free communication ensures that you understand the expert’s advice and make sound financial decisions. Also, seek an expert with open communication lines, whether via phone or email. That way, you can reach out to them whenever the need arises and expect a response within the day.Step 2: Proactive Planning
It’s prudent to think ahead and find an expert who prioritizes year-round strategies instead of last-minute fixes. By working with a professional who takes a proactive planning approach, you can identify tax-saving opportunities before deadlines and leverage them to save money for years. This will also help you mitigate future risks that can trigger unnecessary audits.Step 3: Ethics
Integrity is non-negotiable when it comes to dealing with tax advisors. Watch out for a professional who prioritizes compliance without pressuring you into unconventional tax avoidance schemes that can land you in jail. At the same time, the professional should follow through on promises without constant reminders from your side.Red Flags to Avoid When Choosing a Tax Advisor
Prevalent red flags to avoid when finding a tax advisor include:
- Vague provisions about fees or billing.
- Poor communication in terms of delayed responses.
- Refund or tax break guarantees even if you’re ineligible.
- Missing credentials or proven expertise.
For a deeper understanding of potential pitfalls, read about Common Tax Deductions for Small Businesses to ensure your advisor is maximizing your benefits ethically.
Maintaining an Effective Relationship with Your Tax Advisor
After choosing a tax advisor, it will help if you cultivate a healthy relationship to get the most out of their services. This means organizing documents early to avoid last-minute fixes, communicating changes in time, and planning ahead to complement mid-year or ongoing tax-saving strategies.
Consider our Outsourced CFO Solutions to support ongoing financial planning and maintain a productive relationship with your tax advisor.
