Many people aren’t looking for a tax advisor simply because they aren’t looking for another expense. But there are many ways that the advice and insights from a professional can help you save cash in the end.
What is a Tax Advisor?
A tax advisor, or tax consultant, is an expert on all aspects of taxes, regulations, stipulations and many things the average person is not fully aware of. Don’t confuse a tax advisor with your averagetax preparer. While the tax preparer can be a great help in filling out forms and providing some direction, those with extremely complex financial lives will need a special kind of expertise.
To illustrate the need for a professional in these matters, consider this. The current instructional for the simple 1040 form is 207 pages long, it was only 2 pages long in 1940. The Tax code itself is a ponderous tome that has recently been summed up at 3.7 million words. Unless you have lots of time for some intense reading, there is a good chance you will miss something here and there that could be very beneficial to you.
This is why a tax pro can be very beneficial to your tax work. While tax software can make it much easier to accomplish this task and lead to fewer errors, there is no comparison between the work of a processing software and the human mind — at least not yet.
Who Needs a Tax Advisor?
Anyone paying taxes can benefit from the special insights and expertise of a tax advisor, but those with specific financial situations will need them even more. Certain factors such as self-employment income, income from rental properties, stock options, real estate transactions, trust funds,retirement savings accounts and home offices can contribute to the need for some expertise on the matter. Those operating in two or more countries can also use a tax advisor to direct them to the most cost-effective ways of staying within the boundaries of the law.
Then some people will not need a tax advisor on their constant payroll, but there are some circumstances where this expertise can be especially valuable. If you are getting married divorced, adopting a child or even having your own, receiving an inheritance, starting a company, beginning a new job or selling a house, a tax advisor might have some good suggestions on how to do this better.
A tax advisor is not just important during tax season, where returns are in order, but also during other times of the year. They are well-versed in all the laws pertinent to your case even laws that have been recently placed in effect. They can also tell you how to best save money during tax season, and time the sale of large assets perfectly to maximize profits.
How to Choose a Tax Advisor
Recommendations from friends, colleagues and business associates is the best way to find a tax advisor that is best for your needs. Then do some research on any of the tax advisors you receive recommendations for. Just like doctors, there are specialties in the tax realm and you will get the best results by selecting a expert in the field you are working.
So, take the time to consider what your needs will be before looking around. Once you have found a few that seem to fit your need be sure to ask about certifications, affiliations, licenses and more. Don’t assume that a tax advisor is only for the extremely affluent either. A tax advisor may charge you a few hundred dollars to save a couple thousand and this is good news for anybody.
At Vitale & Associates LLC we have extensive experience in the field and are confident we can help give you a better perspective of your tax life. If you are interested in knowing more visit our website.