Income Tax Preparation

As a CPA for over twenty five years, a day does not go buy without someone asking me, how do you find a good tax preparer.  The answer is in the question.  Do you want a Tax Preparer or Tax Advisor?  What’s the difference?

The difference can mean a lot of money for you to keep!

One of the most important steps you can take in your tax and wealth strategy is to find the right tax advisor. 

I’ve outlined the differences between a Tax Preparer and a Tax Advisor and a few key qualities to look for in a Tax Advisor:

Finding the Right Tax Advisor

One of the most important steps you can take in your tax and wealth strategy is to work with a Tax Advisor NOT a Tax Preparer.  I’ve learned over the years that it doesn’t matter what letters are after the name, CPA,  Master of Tax, etc.  What matters is the individuals approach to serving you – either in capacity of Tax Preparer or Tax Advisor.

How can you tell the difference?

The Role of the Tax Preparer:

  • Meets you in the first quarter of the year
  • Limits his/her questions to the specific papers you brought with you.
  • Doesn’t question the “why” behind the numbers
  • Prepares your return
  • Delivers your return
  • Sees you next year

The Role of the Tax Advisor:

Your Tax Advisor should meet with you every Fall to reduce your taxes – legally.

A Tax Advisor is pro-active and should act as your partner, a member of your team to take steps throughout the tax year to use strategies to reduce your tax liability.  By committing to our tax planning model, you will know that you are paying the least amount of taxes every year.

Remember – you can only implement tax reduction strategies in the year that you create the liability.

Your Tax Advisor Should Ask You Questions (Lots of them)

If you have to ask all the questions, then you have a Tax Preparer, NOT a Tax Advisor.

It is a necessity for your Tax Advisor to ask you a lot of questions. Questions enable your tax advisor to understand your situation and goals.  A good Tax Advisor will challenge you and your decisions. 

Here are just a few examples of questions your Tax Advisor should ask you: 

  • Why do you have such a large 1099 for interest income?
  • Why did you receive such a large 1099 for Capital Gains, yet your brokerage account  value dropped by 25%?
  • Why are you not accelerating your loss carry forward?
  • Why are you not taking advantage of the favorable capital gains laws?
  • What were your savings goals for the year and did you hit them?
  • What are your personal and professional goals for this year?
  • Are you working within a budget and do you track ALL expenses?

Remember, taxes are based on facts and support documents.  The more your Tax Advisor understands the greater the opportunity to reduce your tax liability

Your Tax Advisor Will Be Able to Reduce Your Taxes

By asking questions, by being open to change, by coordinating your activities in a tax efficient way, your Tax Advisor will be able to reduce your tax liability.

This is The BIGGEST Tax Reduction Strategy I Can Recommend.

Call your Tax Advisor BEFORE you make a decision and spend your money, sell a property, liquidate a stock position, buy new equipment, lease that car, borrow money and the list goes on.

You Need to Increase Your Tax Awareness

By including your Tax Advisor in your thoughts and ideas, your Tax Advisor will be able to share tax reduction information with you so that you can make the right decision to minimize your tax liability.

Your job is to identify business and money making opportunities, share your ideas with your Tax Advisor and then implement tax reduction strategies before you pull the trigger.

You Must Keep Good Books and Records

This is the key to a successful tax reduction strategy. 

If you don’t like to keep books and records then you need an alternate plan.  Your Tax Advisor can do this work for you.  His fee to keep you organized will be paid by the tax savings you will receive.

I am an advocate that100% of your work activities should be devoted making money – all support should be delegated to increase your efficiency and profitability.

The Role of the Tax Advisor

  • Meets with you in the first quarter of the year
  • Questions the numbers within your tax documents
  • Prepares your tax return
  • Delivers your tax return
  • Explains your Free-Cash flow numbers
  • Works with you to reset goals and re-align cash flow
  • Provides tax reduction advice and strategies throughout the year
  • Implements tax planning strategies in September – November
  • End the year knowing that you paid the least amount of money in taxes. 
  • Buy your Tax Advisor a good steak dinner

As Yogi Berra said, “When you come to the fork in the road, take it.”

Time to decide, who do you want on your team, the Tax Preparer or the Tax Advisor?

Call 312-917-1107 to schedule your first complimentary meeting.

Thank you for your time and consideration.