Unlike a tax preparer who focuses on filing income taxes, a tax consultant takes a more holistic approach to helping clients minimize their taxes while adhering to state and federal tax laws. They typically have a bachelor’s degree in business administration or accounting, and often complete continuing education courses to keep their knowledge up-to-date.
As a tax consultant, you’ll be working with complex data and financial information to help clients find tax-saving opportunities. To meet the needs of each client, you must have excellent analytical thinking skills and problem-solving abilities to look at each unique situation. Strong written and verbal communication skills are important to effectively explain your findings to your clients. In addition to these critical skills, you’ll need to be proficient with a variety of computer and software programs. Some of these include spreadsheets, payroll, accounting, and taxation software like QuickBooks, Peachtree, Sage 50, ATX Tax, Drake Tax, and Lacerte.
When to Hire a Tax Consultant
While many people may think they don’t need a tax consultant, the reality is that the more complicated your income and expenses are, the more likely you are to need professional guidance. Here are some situations in which it makes sense to consider hiring a tax consultant:
You have a high income. It’s no secret that the higher your income, the more you pay in taxes. If you are close to or over the income threshold where it makes more sense to itemize deductions, a tax consultant can help you maximize the benefits of this strategy while staying compliant with the law.
You own a business. Filing taxes is much more involved for a business owner than for an employee, and a tax consultant can help you navigate complex issues like determining the type of business structure that best suits your needs and understanding the impact of changes to business expenses on your taxes.
Despite what you’ve heard about hiding money offshore, or stashing it in a Swiss bank account, there are far more realistic and legal ways to reduce your tax liability. A tax consultant can help you brainstorm creative and strategic ways to cut your tax bill, saving you thousands in the long run.
How to Choose a Good Tax Consultant
Finding the right tax consultant is crucial for your peace of mind and the health of your finances. The best way to do so is by asking for recommendations from trusted friends and family. You can also find resources online that can help you assess a potential candidate’s qualifications and experience.
While a degree and certifications are key, you’ll also want to look for someone with a high level of personal integrity. You’ll be trusting them with sensitive information, so it’s important to find a person you can communicate openly and honestly with. Ideally, you should meet candidates in-person before making a decision, even if this is just to get a feel for their communication skills and comfort discussing sensitive financial matters. Steuerberater