Albert Einstein said that the difficult thing is to understand the income tax. Some people find the tax-related procedures confusing and hire a tax consultant. But who is exactly a tax consultant? What is the work he/she do? How can a tax consultant benefit you to minimize your tax liability?
What is a Tax Consultant?
A tax consultant is a person who manages tax situations. He/She can help you to capitalize on tax deductions and minimize tax liability. These consultants are trained in accounting and tax law. They can also help you with tax planning, charitable giving, and all other tax requirements.
The experience, skill, and work decide the fees for a tax consultant. If you are into investments or need help with tax issues and long-term investment plans, there are many tax consultants in California to help you.
What is the job of a tax consultant?
A tax consultant saves you from underpayment and overpayment of taxes. An underpayment of tax may cause you penalities, and overpayment makes you lose your money. A tax consultants’ job is to guide people by giving useful financial advice on income taxes, retirement taxes, estate, and many more. Tax consultant needs to be aware of the new tax laws and requirements that happen in the country.
Here is the list of services provided by tax consultants to the clients:
- They minimize the tax liability
- A tax consultant prepares your tax return by collecting and organizing the documents.
- He/She sorts the tax according to the events of life such as marriage, deaths, etc.
- A tax consultant deals with the income of rental properties.
- He/She helps you to manage the capital gains taxes
- He/She looks for deductions to manage the less taxation.
You might have heard about the corporate tax law, which has different rules than the individual taxes. The businesses and their owners require a helping hand in the tax process. Due to this situation, many tax consultants provide business tax services. A business tax consultant makes sure that businesses are taking all the tax benefits and he/she ensures minimizing tax liability for them.
The working areas of a tax consultant are government agencies, public accounting firms, or financial accounting firms. Some works for a firm, and some works independently. These days the services can be accessed either from offices or online. They have a wide range of clients, from individuals and families to businesses and corporations. Online tax preparation services include tax consultant, and he/she may be asked to sign on a tax return prepared online by a client. This assures the client that the tax return is prepared correctly.
What is the cost of a tax consultant?
There are many aspects to the cost of a tax consultant. Various factors play major roles in the fee structures. It depends on the scope and complexities of the tax situation. If at a specific location, the cost of living in the highest, it shows effects on the fees of a tax consultant. Also, the fees are dependant on the qualification and skills of a tax consultant if your tax condition needs high-quality knowledge to handle. The more the work needs to handle your tax situation, the higher the fees will be.
The study from the National Society of Accountants in 2019 shows that the cost for an average tax return is around $300. To make sure that the things are legit, you need to pay this amount to receive the fair payment back from the state government. For online tax consulting, according to Business.com, you may need to pay a fixed fee ranging from $25 to $1200. This may vary depending on the situation of your tax.
For businesses, the fee ranges are different. They can take benefits from a customized plan, and the fee can add up to $2000 a year, according to Business.com. This is good for the businesses that do not want to spend much time paying attention to the taxes.
Benefits of a Tax Consultant:
Hiring a tax consultant to handle your tax situation has many benefits.
- You can save the time required in preparing tax returns.
- A tax consultant makes strategies to maximize your tax liability.
- He/She keeps the clients compliant with the tax obligation.
- A tax consultant keeps a client updated with various tax laws.
- A tax consultant makes complicated computations for you.
- He/She researches and analyses the tax rules and regulations and updates your tax situations according to that.
- A tax consultant can make financial planning for you.
What are tax consultants and tax preparers?
Finding a good tax consultant is important to handle your tax situation wisely. You need to be sure that the tax consultant is doing exactly what you need. For example, if you just need to file your taxes, a tax preparer is best suitable than a tax consultant. You must know the difference between both.
A tax preparer is a simple tax professional who focuses on making income tax forms for those who need to file their taxes. They complete a short training and register with the IRS for getting a tax preparer number instead of going for high taxation qualifications. To create the forms such as Form 1040, Form 1040 EZ, Form 1099, tax preparers help. They work for both individuals and businesses to file tax-related documents.
Tax consultants work with more complex operations regarding taxation. A tax consultant can help to manage the tax-related issues in various situations, whereas a tax preparer is useful for basic income tax returns.
Some tax consultants have formal education and experience to give the best services in the form of valuable advice related to the tax process. These tax consultants hold a license of Enrolled Agent(EA) or Certified Public Accountant (CPA). Some tax consultant who are only registered with the IRS. But the specialized education in the taxation field showcases their knowledge.
How would you find a tax consultant?
There is a wide range of tax consultants in California with various taxing services. That is why you need to think wisely to choose the best suitable tax consultant for your tax situation. You can desperately search the firms to look for a consultant to fulfill your tax needs, and if you failed, you will probably going to try online tax consultation. It’s a convenient way of consulting, and you can work solely.
It’s always a good thing to take advice from your friends and family, and they can guide you if they had a tax consultant before. Also, there are plenty of reliable online sources that will help you to find a perfect tax consultant.
When you started to find tax consultants, look at their qualifications and licenses. Do not ever blindly trust anyone and disclose personal information. Check the reliability of a consultant, and you can also see the reviews from the previous clients.
In addition to the key characteristics, check for good communicational and written skills. They should be able to embed the tax laws with your current tax situation in a way that will easy to understand. You must be able to understand the strategies applied by the tax consultant.
What is required to become a tax consultant?
Tax consultants may not have a formal certification, but they have a degree in finance, accounting, tax law, and many other relative fields. Paid consultants who prepare the tax returns must be registered under IRS. The IRS also requires them to register for a PTIN, which is a Preparer Tax Identification Number.
However, a prepare competency test is required to be taken by the tax preparers. Some of them do not require to take this exam which includes professionals such as EAs, attorneys, CPAs, etc. Also, tax preparers who do not take part in the preparation of the series of Form 1040.
The tax return preparer who passed the competency test receives the provisional status from the IRS. The professionals like CPAs, attorneys, and EAs receive active status. There is a tax compliance check and sustainability check, which must be passed by the paid tax preparers. With all these requirements satisfied, a tax preparer can become registered under IRS law.
Certifications of a tax consultant
To enhance the job opportunities, tax consultants can pursue some certified courses.
- Annual filing season program: Offered by the IRS, this program can be taken by the seasonal tax professionals to maintain their skills. It also provides a certificate to the tax professionals when they pass the tax law test.
- Accredited Tax Advisor(ATA): Passing a professional exam and having three years of experience in tax preparation, can earn the credentials from the accreditation council for accountancy and taxation issues to the experienced tax preparation.
- IRS Enrolled Agent: This is the highest credential provided by the IRS to tax professionals. It requires to pass a 3-part comprehensive exam, or the tax professional should have experience as an IRS employee.
A tax consultant has high skills in tax codes and can work for your whole year. A tax preparer’s job is seasonal, which required only filing the tax returns. You should always check whether you need to have a tax consultant or not according to your tax situation. Want to reduce tax liability? These tips might help.
- Find a local tax consultant that will help you to reduce your tax liability for retirement. You can tax consultants in California in both ways- offline and online.
- Be your own guide. You can take some steps to minimize your tax liability. When you have to give tax, make tax deductions which will help to minimize your taxable income. Look for a tax shelter or tax extension for benefits.
Sanjay TaxPro – Your guide in taxing situations
Benjamin Franklin once said that nothing in this world could be said to be certain, except death and taxes. So if you cannot get away from the taxes, you should handle them in a way that will benefit you. And to make that possible, we are happy to help. We at Sanjay TaxPro provide financial services to make your life free from hectic situations. Our goal is to provide the fastest and accurate services to our clients. Being one of the best tax consultants in California, we provide our service in both areas- personal and business. Our services are
- Personal Tax Filing
- Bookkeeping And Payroll Services
- Financial Investment And Planning Services
- Small Business Tax Filing / Business Accounting
- IRS Audit Representation
- ITIN Processing
- Tax Advice
- LLC Formation & Incorporation Services
We will easily file your taxes without wasting your time and help you to keep track of your daily finances. We are committed to make suitable planning and investments for you and to give you only the best tax advice.
At Sanjay TaxPro, we provide the best solutions to businesses to help in their taxing situations and save their valuable time. We help them to form a suitable business structure from tax planning. We also provide tax audit representation for our clients. Sanjay TaxPro is in agreement with IRS for processing W7(ITIN) applications as CAA.
No matter what and how is your tax situation, Sanjay TaxPro will come to rescue you. We have highly qualified tax professionals to solve your every issue and provide the best solution. Just fixed an appointment with us and opened the door for a stressless tax process.