Whether you’re looking to make tax season less stressful, want to ensure that you’re taking full advantage of all possible deductions or credits, or are navigating the tax implications of your business strategy, seeking professional Steuerberatung can be crucial. But how do you find the right professional? And what is the difference between a tax advisor and a regular tax preparer?
For many consumers, finding a qualified professional can be tricky. The first step is to determine what your specific needs are and how they might change over time. For example, if you have significant investment income or plan to sell a major asset, a certified financial planner (CFP) can help you manage the tax ramifications of these transactions.
Other common services a CFP can provide include providing insight into various tax deductions that could lower your taxable income, and discussing how you might better structure your business operations to maximize tax efficiency. For small business owners, this can be especially beneficial, as it can reduce the amount of money you pay out in taxes while allowing you to keep more of your own hard-earned cash.
Tax deductions are expenses you’ve incurred that reduce the amount of income subject to taxation. For instance, if you purchase a new piece of equipment for your business that qualifies for a capital gains deduction, you will only be taxed on the difference between the cost and its fair market value. Similarly, if you invest in an eligible retirement account like an IRA, the investment will be taxed at a much lower rate than ordinary income would be.
However, not all advisors are able to effectively communicate how certain strategies can minimize your tax liability. To do so, they need to know what type of analysis might be construed as a recommendation that crosses the line into tax advice and what types of guidance are considered to be just helpful tips.
A good tax advisor will also be able to recognize that there are certain tax strategies that still require a CPA or tax attorney’s sign off before being recommended to clients. This can save the advisor a great deal of time and money in the long run as they won’t have to spend valuable resources chasing down gray areas that may not be fully understood yet.
Regardless of your particular circumstances, it’s worth finding a quality professional that can provide expert tax guidance and keep you up to date on the latest tax rules and regulations. You can typically find one of these professionals by word-of-mouth, by scouring the internet for reviews, or by visiting your local chapter of the American Institute of CPAs to see their list of credentialed members. Ultimately, it’s worth it to get the help you need so that you can avoid costly mistakes and keep more of your own hard-earned money.