What Is Tax Consulting?
Tax consulting is a professional service that enables the taxpayer to comply with his or her tax obligations. It is the practice of law in some countries and a specialized area of accounting in others. Tax consultants provide advice on all aspects of the tax system, both direct and indirect taxes.
Some tax consultants also specialize in areas such as management consulting, forensic accounting, or business valuation.
Tax Consultants – Who Are They?
Individuals who want to become tax consultants complete extensive training courses on their own time. A bachelor’s degree is generally required for entry-level tax consultant jobs, but an advanced degree may be necessary for some higher-paying positions.
Tax consultants are not attorneys and do not give legal advice; however, they work with many types of laws that will help you better prepare your tax return. Their expertise helps them identify potential problems and make sure you claim all of the credits to which you are entitled.
Tax consultants also know the tax laws for most states, which will help them prepare your return if you live in one of those states. Tax consulting does not require any experience or special knowledge outside of basic education requirements.
Why Should I Hire a Tax Consultant?
With a busy life, it is easy to make mistakes when filing your own tax return. Tax consultants will take the time you do not have to do all of the research for you and make sure that you are getting every credit or deduction that applies to your situation.
Although large accounting firms usually offer only auditing services, small companies focused on tax consulting will provide a range of related services, including bookkeeping and tax planning.
Tax consultants can help with:
- Tax planning and filing (including complex business and international taxation)
- Fraud and forensic accounting
- Management consulting (strategy and operations)
- Valuation services (real estate, valuation of closely-held businesses or family partnerships, etc.)
- Litigation support (document production, due diligence in cases of litigation or dispute)
- Advisory services (business consulting, economic development, business plan development as well as privatization and PPP advisory)
How to Find the Right One for You?
Here are some considerations to help you find the right consultant for you.
- If you only need the tax consultant’s help for one specific issue, like estate planning or an immigration issue, make sure that the consultant is well versed in that area.
- Check references and ask friends or colleagues if they can recommend any good tax consultants in your area. Tax consultants are experienced at helping seniors, families with children, self-employed individuals, and others. Asking around can help you find a consultant who meets your needs.
- Be sure to check licensing requirements in the states where you will be working with a tax consultant. You can usually do this by checking with the state’s board of accountancy or a similar agency.
- Make sure that the tax consultants understand the laws in the countries where you work and live.
- Once you have narrowed your list, ask each tax consultant for a rate quote and ask to see examples of their past work. If possible, meet with several consultants before making a final decision. Most will offer free consultations.
Tax Consultants’ Qualifications and Skills
Tax consultants are required to have several years of education, including a bachelor’s degree in business or accounting. Many have advanced degrees. Some are certified public accountants (CPAs), but it is not necessary to obtain a CPA license before becoming a tax consultant.
The main role of these professionals is to use their expertise in taxation to help ensure that their customers get the largest tax refunds possible.
Benefits of Hiring a Professional to Complete Your Taxes
A major benefit is that you can use an expert’s knowledge to maximize your tax refund. If you are uncertain about any aspect of your return, a tax consultant will have the knowledge to help ensure you get all of the credits and deductions you deserve.
Questions You Should Ask Before Hiring a Tax Consultant
Here are some helpful questions to ask to help you find the right tax consultant:
- How long have you been a tax consultant?
- What school did you attend, and what degrees do you hold?
- Do you have any specialty areas? What are they?
- Can I get a written estimate of the tax savings I would get from using your services before I commit to anything?
- What is your fee structure- hourly, flat fee, or contingency?
- Can I speak with some of your recent clients?
- Where can I find more information about you and your firm?
- Are there any references I can contact to find out more about the service you offer?
The Bottom Line
When it comes to taxes, you can’t afford to gamble with the possibility of owing more money. Hiring a professional can help ensure that you get all of the tax credits and deductions for which you are eligible. Before hiring someone, make sure you check his or her references, along with their education and licensing requirements.
Consider also asking for a written estimate of the potential savings you could get from using their service and whether they offer free consultations.
Above all, remember that there is no substitute for knowledge when it comes to taxes. Anyone can fill out a tax return, but only an expert will ensure that you owe nothing and only get money back. Tax consultants are experts in this field and can help you get the most money back too.
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.