Hi!
Welcome to our latest comprehensive and well-researched article on CPA tax advisor
In today’s article, we will look at the qualities and responsibilities of CPA tax advisors.
In particular, we will delve into the following:
By the end of this article, you’ll be clearer on how to identify the best tax advisor for your tax needs.
Let’s get started!
A Good CPA Tax Advisor
Over 490000 active tax accountants in the US offer clients a broad range of tax services.
Tax advisors work in public accounting firms, non-profit organizations, banks, and government agencies.
The primary duties of a tax advisor include:
- Providing relevant legal tax advice to clients
- Assisting clients in complying with IRS requirements by filing relevant tax documents
- Performing tax audits
- Assisting in tax planning
Tax advisors may be licensed CPAs, tax accountants, tax attorneys, tax preparers, or enrolled agents (EAs).
Qualities of an efficient tax advisor
Finding a CPA for taxes is often a daunting prospect.
Tax advisors, also called tax consultants or tax accountants, come with varying skill, education, and experience levels.
And identifying the perfect tax professional for your tax needs isn’t easy.
Fortunately, we have prepared the ultimate list of qualities for a good tax agent.
Consider the following when searching for a tax accountant:
1. Thorough tax knowledge
The American tax infrastructure is massive.
A productive tax advisor must be a specialist with deep knowledge and experience of the various tax policies and statutes.
Using a qualified tax professional will ensure that you get high-quality services.
2. Specialization
When shopping for a tax accountant, ensure that your ideal candidate specializes in taxes.
An accountant, certified professional advisor (CPA), or tax preparer provides different financial services.
Therefore ensure that your ideal candidate only concentrates on offering tax services for the best results.
A tax specialist will be conversant with the latest tax laws, policies, and trends.
3. Excellent communication skills
Tax professionals wear many hats and deal with different people, including business owners, CEOs, private individuals, and the IRS.
To effectively execute their mandate, tax advisors must possess excellent communication skills.
Being a good communicator helps tax advisors resolve conflicts, reach agreements, and assist in negotiations.
4. Professionalism
Certified public accountants are finance professionals who offer different accounting services to their clients.
To be effective, CPAs must demonstrate high professional and ethical standards.
Being professional improves the CPA’s career opportunities and increases trust from clients.
5. Attention to detail
Taxes are a complex branch of accounting with many moving and rapidly changing tax regulations.
A good tax advisor should be meticulous and keen in their work to avoid potential errors that ultimately cost the client.
Tax consultants must have efficient organizational systems that correctly categorize the client’s tax issues.
6. Experience
If you need a CPA tax professional who will do a perfect job, the experience level should be high up your list of requirements.
Taxation services are often complex, with many potential legal and ethical loopholes.
An inexperienced tax advisor may fail to recognize potential opportunities, errors, or other challenges arising from their tax services.
To be on the safe side, engage the services of a CPA tax consultant with several years of tax experience.
7. Problem-solving skills
The primary duty of CPA tax advisors is to offer solutions to their clients’ different tax situations.
Tax consultants need to be problem solvers who find simple solutions to often complex tax situations.
The ideal tax advisor must possess the perfect mix of experience, deep tax knowledge, and an analytical mind.
8. Confidence
Part of a tax advisor’s job involves dealing with complex client situations that require the tax accountant to maintain high confidence levels.
Having confidence increases the credibility and respect of the CPA in the industry and in the client’s eyes.
9. Accountability
Accountability means being responsible for your actions.
An accountable CPA will always do the right things and avoid cutting corners.
Unfortunately, the tax industry is full of unscrupulous tax professionals.
If you need to engage the services of a tax consultant, consider doing some background checks.
10. Creativity
Tax issues are often long and complicated, sometimes needing a creative touch to unravel.
Apart from being technically competent, successful tax advisors need a creative flair to solve complicated tax scenarios.
Creativity allows the tax professional to look at the tax problem differently.
Creativity allows tax consultants to develop a tax strategy that will ultimately shield their clients while complying with tax regulations.
11. Competitive pricing
Tax advisors charge between a few hundred to thousands of dollars for tax services.
A good tax consultant should be competitively priced based on the geographical region, size of the tax firm, and the tax services they offer.
Why do you need a tax advisor?
Many people claim that they can do their taxes which is often true.
But do you know you’re better off enlisting the services of a professional tax professional?
Here is why you should let tax experts handle your tax matters.
1. The tax code is complex
The US tax code is long and complex, with multiple legislative and state adjustments being made to it every year.
In 2021, the IRS made inflation adjustments to over 60 tax provisions.
The federal plus state tax adjustments mean that you’ll have difficulty filing your returns if you aren’t an expert.
When filing a business tax with more tax categories than the typical personal income tax document, things get even more complicated.
It’s advisable to invest in the services of a professional to avoid errors.
2. Save time
It takes the average American 20 hours to file their income tax with deductibles.
The time more than doubles when filing business or property tax.
To avoid spending long hours doing taxes, entrust this very vital compliance process to a professional tax consultant who can do the work in half the time and at a reasonable fee.
3. Avoid errors
People who do their taxes are prone to errors.
According to a CNBC 2019 report, over 80% of respondents claimed that they made a tax mistake when filing their returns.
An IRS report concludes that paper and e-file returns have a 21% and 1% error rate, respectively.
Engage a tax professional with the relevant skills and training to do your taxes.
A professional will reduce filing errors that may reduce your tax refund and trigger a tax audit.
According to the IRS, these are the common tax errors:
- Sending tax returns without enough postage stamps
- Omitting important information on checks and money orders
- Not correctly dating tax returns
- Addressing tax returns to an incorrect IRS office
- Incorrectly arranging tax documents
- Not attaching all W-2 and 1099-R forms
- Unreadable tax returns due to poor handwriting
- Incorrect filing status
These errors may trigger a tax audit from the IRS, which is costly and time-consuming.
4. Tax guidance
Tax advisors are professionals who will answer your questions and provide guidance in case of any challenges when filing your tax returns.
Having someone holding your hands means you can get clarifications and expert opinions in half the time it would take to contact the IRS.
5. Tax savings
Tax consultants are skilled tax professionals with the training and experience to help you make intelligent choices to improve your tax credit.
According to an IRS 2021 report, over 70000 tax refunds have been initiated, with the average refund amounting to $2873.
Without the help of a tax advisor to guide you, the probability of realizing and filing a refund form on time reduces.
The tax consultant will quickly identify refundable tax brackets.
A tax professional will guide you in the best tax-saving moves, which will prove invaluable in the long run.
6. Minimize your tax liability
A professional tax CPA tax advisor is invaluable in helping you reduce your tax liability and ultimately save money.
Tax liabilities refer to the amount of money you need to pay in taxes to the state and federal governments which may be a hefty sum if you dont know how to reduce it.
A tax advisor will audit your tax records and identify a practical plan that will reduce your tax liability, including setting up a retirement account, starting a health saving account, claiming business deductions, and itemizing sales tax.
Without the direction of a tax consultant, you may not realize the opportunities available to you on reducing your tax liabilities.
Where can you find a tax accountant?
To find a CPA for taxes is not a walk in the park.
With over 400000 qualified tax accountants in the US, the choices are limitless.
Unfortunately, some of these tax professionals may not be a good fit for you.
To engage the best tax preparer, consider the ideal qualities of a practical tax accountant we discussed previously.
Here is how to find a tax advisor who will help file your tax returns.
1. Check the IRS directory
The IRS tax directory is the ultimate yellow page for tax professionals in the US, listing all credentialed tax professionals in your area.
To find a tax advisor, input your zip code, the credential you require (attorney credential, CPA credential, etc.), and the search radius.
The directory will search and display a list of the tax preparer who meet your search criteria.
Using the IRS tax directory ensures that the tax advisors meet all the IRS statutory and ethical requirements to practice.
2. Check financial advisor professional bodies
A good way of identifying suitable candidates to do your tax filing is by checking on professional tax advisor databases.
The best tax professional bodies include:
- American Institute of Certified Public Accountants (AICPA)
- National Association of Tax Professionals (NATP)
- National Conference of CPA practitioners (NCCPAP)
- National Society of Accountants (NSA)
- National Society of Tax Professionals (NSTP)
Engaging the services of a tax consultant from a professional body will ensure that the tax return preparer will do a professional job.
3. Seek referrals
Referrals are an excellent method to find a CPA for taxes in your area.
By getting recommendations from people in your industry, you’re likely to get an efficient tax consultant.
Create a list of the ideal tax preparer and book their services at the beginning of the tax year when they are less busy.
This will ensure that when the filing season finally begins, you won’t have problems accessing your recommended tax professionals.
Where do tax advisors work?
CPA tax consultants work in various industries and sectors, offering a wide range of tax services to their clients.
Here are some of the places you will get accountants for tax.
1. Tax accounting firms
CPA advisors work in tax firms offering professional CPA tax preparation services, including auditing tax reports, preparing tax returns, and offering taxation advisory services.
Some of the taxation specialties CPAs offer to include:
- Income tax CPA
Personal tax CPAs specialize in handling income taxes for individuals.
These personal tax accountants often help individuals file 1040, 1040EZ, and 1040A personal income tax forms.
- Tax planning CPA
Tax planning accountants specialize in offering tax advisory services to taxpayers.
The primary duty of a tax planning CPA includes;
– preparing a tax credit plan
– formulating a tax forecast
– calculate optimum tax rates for their clients
– calculate clients’ tax deductions
- Tax auditing services
Tax auditing involves analyzing tax documents and correcting any tax filing errors to comply with the IRS tax requirements.
A tax auditor also helps their clients during IRS tax audits and may represent them in the IRS audit hearing.
2. Banks
Many banks and other financial institutions have CPA tax consultants working for them.
Typically a bank’s tax advisor will also double as an investment advisor and help the bank’s clients make intelligent investment decisions and comply with the necessary tax regulations.
3. Tax attorney’s office
Tax consultants work together with tax attorneys to offer clients comprehensive tax services.
While tax attorneys concentrate on the legal tax issues, tax advisors perform tax audits and help prepare tax plans for clients.
4. Government (local, state, federal)
Government agencies typically hire tax consultants to help them with their tax issues, including performing tax audits, detecting tax fraud, and preparing tax documents.
The IRS also employs tax advisors to review tax policies, prepare civic taxation programs and help their staff on tax issues.
5. Corporate tax offices
Giant multinational corporations often employ the services of tax consultants to do tax auditing and planning services in their countries of jurisdiction.
6. Specialized tax organizations
Tax consultants can work in tax companies focusing on specialized branches of tax law, including international tax, income, and payroll tax.
Which types of tax services do tax consultants offer?
Here are a few of the critical services an accountant tax preparer offers.
File tax returns
CPA file taxes on behalf of their clients.
Some of the CPA tax return services include:
Income tax returns
A tax return CPA helps clients determine their tax liability, schedule tax payments, and request tax refunds if any.
Tax return accountants help customers comply with tax regulations by ensuring all tax documents filings are done correctly to avoid tax audits and penalties.
Income tax accountants typically deal with:
- Individual income tax
- Corporate income tax
- Capital gains income tax
- Payroll taxes
A CPA personal tax agent is an essential individual in the tax ecosystem.
Offer tax advise
Tax consultants offer relevant advice on the rules and regulations governing taxes.
By providing advice on legal tax advice governing state and federal taxes, tax accountants help clients fill tax forms correctly, including tax refund and tax return forms.
Audit tax documents
Tax file accountants analyze clients’ tax records to eliminate errors and highlight anomalies or discrepancies.
Tax auditors help clients understand what they need to do to avoid an IRS audit, including initiating disclosures, organizing tax documents, and representing them in tax audit panels when necessary.
Prepare tax plans and forecasts
Tax consultants can create effective tax plans and forecasts, By leveraging tax software like QuickBooks, Xero, and sage,
Tax planning helps individuals and businesses identify tax opportunities and ways to reduce their tax liabilities.
Tax forecasts help project tax estimates which allows a company estimates its profitability during a financial year.
A step-by-step process to file personal tax returns
Filing personal tax returns is an often overwhelming process.
Fortunately, we have prepared a simple step-by-step process to file your returns quickly and efficiently.
1. Collect all the relevant paperwork
Essential tax documents include a W2 form, 1099 or 1099 INT form, charity donation, direct deposit slips, student loans receipts, medical bills, and business expense receipts.
2. Identify a filing status
Filing status determines tax exemptions, tax deductions, filing requirements, and the correct tax amount you owe.
Filing status depends on your marital status since household expenses affect your taxes.
3. Choose a tax filing method
You can file your taxes electronically using e-file tax software or traditional paper returns.
The IRS recommends e-filing to reduce potential filing errors.
4. Itemize your taxes
Decide on whether to itemize or take standard deductions in your tax returns.
These two methods are important since they reduce your tax liability.
5. Make your tax payment
After meeting all the previous tax requirements, it’s now time to make your tax payments.
Pay by direct deposit, credit card, digital wallet, or electronic federal tax payment tax system (EFTPS).
6. Dont miss the tax deadline
The federal tax deadline is usually in mid-April.
Confirm the tax deadline on the IRS website.
The tax deadline for 2022 is between the 18th and 19th of April.
Conclusion
What is CPA tax is often confusing and overwhelming, but we hope our comprehensive article has answered all your questions on this topic.
For aspiring accountants and tax, this guide will provide a solid career path that you can use to launch yourself into this industry.
Tax clients will equally be educated on what matters when shopping for a CPA tax advisor.
Read on for detailed answers on some of the common Frequently Asked Questions on this topic.
Cheers.
