What Choosing the Right Tax Advisor Means for You

What Choosing the Right Tax Advisor Means for You

by Joseph Vecchio February 13, 2021
Tax work

Without a passionate tax advisor, many people have the following perspectives on taxes:

  • As a necessary evil
  • Impossible to understand
  • All my hard earned money goes to paying taxes

Falling into this thought process can actually lead to overpaying on your taxes. The perceived complexity of the tax code plays directly into how most people are taught to think about taxes- that they are too complex to even begin to understand. Therefore, many people do not know if their taxes are being overpaid, underpaid, or legally minimized

By hiring a passionate financial advisor, people can change their mindset to reflect the following view of taxes:

  • Taxes help me increase awareness of my business and investments performance. 
  • I know exactly what actions I need to take to minimize my taxes
  • My tax savings can supercharge my wealth building 

While it may set you on the right path, changing your mindset does not make you a tax expert. It is important that you get a Certified Public Accountant or a Certified Financial Planner on your side. 

Here are a few key qualities to search for in a tax advisor:

Your Advisor Should Ask you a LOT of Questions

This will allow them to get the best possible understanding of your financial situation, and your future goals. 

Examples of questions your advisor should ask include:

  • What is your role in your business or investing activities?
  • How is your family involved in your business or investing activities?
  • What are your personal and professional goals?
  • Explain your process for tracking your expenses?

The more your advisor understands about you, the more opportunities there will be to change your taxes. 

Your Advisor Should Reduce your Taxes…Legally

There are many legal ways to reduce your taxes. This implies that there are advisors who attempt to cheat the tax code. It is important that you hire a knowledgeable advisor who can be creative within the law. 

If your situation does not fit within the tax law, your advisor should be able to tell you how to change your situation to fit the tax code.

Your Advisor Should Increase your Tax Awareness- 

Your advisor should be excited to share new information with you about how to reduce your taxes. 

Understanding the rules doesn’t mean you have to be an expert on the tax rules. Your tax advisor should be the expert. With this awareness, you should be able to identify new opportunities for tax savings, and then discuss them with your tax advisor. 

You are the one who is best able to identify potential opportunities because you are the one who is in the day-to-day activity of your business or investing.

While your tax advisor can identify some opportunities after-the-fact, the results are much better and faster if you are able to identify them as they occur, allowing you to start reducing your taxes faster.

Your Tax Advisor Should Prepare Your Tax Return-

NEVER use a tax preparer who isn’t also your tax advisor. You may otherwise get great advice that is never used and lose out on exceptional tax savings. 

The more passionate your tax advisor is about reducing your taxes, the lower your taxes will be.

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