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.

If you’re looking for speed, convenience, and the lowest pricing possible, then definitely go with a preparer at one of the retail franchises or maybe even complete your return online yourself. However, if you’re looking for a trusted advisor with a thorough understanding of the code that’s available all year, then choose a tax consultant. You won’t regret it.

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