During Covid we took the opportunity to do some research. We found that most business owners think that their accountant, CPA, or tax preparer is saving them on taxes. The fact is they aren’t. They are just doing tax preparation. They might check a few simple boxes while preparing your tax return but outside of that tax planning tax work. Let’s look at why CPAs don’t tax plan and what role they can play in helping you manage your taxes.
CPAs Aren’t Tax Strategy Experts
Tax planning requires a deep understanding of the ever-changing tax laws and how they affect your unique financial situation. It also requires a high level of expertise and experience in taking full advantage of every available deduction or credit. While CPAs are highly trained professionals, there are not required to have any specialized educational training in tax planning as part of their certification process.
Additionally, CPAs do not typically have the time or resources to stay up-to-date with the constant changes in taxation rules and regulations. This makes it difficult for them to provide effective advice when it comes to tax planning. As such, most CPAs focus their efforts on staying up-to-date with filing deadlines, ensuring accuracy for each client’s returns, and providing general guidance on compliance issues rather than actively engaging in tax planning strategies.
Why Tax Planning is Important to Tax Savings
A CPA is a great option for completing and filing taxes, however they do not provide tax planning services. Tax planning refers to the strategies used to minimize an individual or business’s tax liability in an ethical manner. While CPAs are certainly knowledgeable about the various deductions available, their focus is primarily on ensuring compliance with applicable laws and regulations.
Tax strategists are tax professionals who specialize in tax planning, and can help you to take advantage of every tax deduction available to you. Working with a tax strategist can be incredibly beneficial–it’s estimated that tax strategy services can save individuals and businesses thousands of dollars in taxes each year.
Benefits of Having a Tax Plan
When it comes to tax planning, there is no one-size-fits all solution. A tax strategist will help you to analyze your tax situation and craft a tax strategy tailored to your specific needs. This type of tax planning requires expertise both in tax law and financial planning, which is why it’s best to enlist the services of a professional tax strategist – like EthicsPro.
It’s important to remember that tax planning is a dynamic process, so it’s wise to take a proactive approach. By staying on top of tax law changes and regularly consulting with a tax strategist, you can keep your tax liability as low as possible.
Do not leave money on the table in taxes – plan ahead and work with a tax strategist to ensure that you’re taking advantage of every tax break available. By consulting with a tax strategist, you can ensure that your tax strategy remains up-to-date and tax efficient – and can save you thousands of dollars in taxes each year.
And remember, while your CPA is great at filing your tax returns, they likely will not be able to help you with a robust tax strategy!