How to Assess and Hire Tax Consultants?
Published on January 3rd, 2023
Who are Tax Consultants?
A Tax consultant tends to make tax filing easy for businesses as they are there for your help and queries every time. They are experts in the tax world just as you are an expert in your business.
If you present them with a difficult situation, they will be able to maneuver around the system much quicker because they were trained to do so. Hiring a tax consultant will grant you peace of mind knowing that your business's taxes were filed correctly and legally.
Roles & Responsibilities of Tax Consultants
A tax consultant, an accountant, and a financial advisor all manage your funds, but each of them has a specific function. Although an accountant and a financial advisor can get certification as tax consultants, filing taxes is not their main concern. Contrarily, consultants have specialized training in tax law. They include all the details regarding local, state, and federal laws that every person and company must abide by while filing their taxes.
After you hire a consultant, they will give you guidance over the phone or in person on every tax-related subject. Their day-to-day responsibilities include:
- Researching tax laws.
- Assisting in IRS and state audits.
- Gathering information and explaining options for best practices to clients.
- Preparing quarterly and annual tax compliance.
- Preparing federal and state income tax.
- Ensuring that tax returns are filed in accordance with tax authorities.
- Representing Clients in Audits
Skills of Tax Consultants
- Research: An essential hard talent that tax consultants need to possess is the capacity to research tax law and regulations. This skill enables the profession to keep up with changes in tax legislation and spot chances to reduce tax liabilities.
- Taxation: This competency relates to a tax consultant's capacity to decipher tax legislation and counsel customers on the most effective ways to handle tax liabilities. Successful tax consultants offer strategies for tax payment and legal compliance.
- Financial Analysis: Another essential hard talent for the tax consulting and tax advisor professions is the ability to analyze financial accounts and tax returns. Accounting professionals can identify places where clients might minimize their tax payments and suggest adjustments thanks to their proficiency.
- Tax Planning: Based on their client's unique objectives and requirements, tax consultants predict tax payments and create tailored tax plans for them. This ability helps the company's bottom line by offering services that lower tax liabilities.
- Communication: These professionals communicate with clients, coworkers, and leadership in writing and through speech. Clear communication is necessary because tax consulting often requires advisors to explain complicated concepts to clients, team members, and non-technical audiences.
- Analysis: Tax consultants break down complex problems into more manageable parts. Understanding and analyzing tax law is critical to providing accurate advice to clients.
- Attention to Detail: These consultants must notice minor details and discrepancies — even a slight mistake in tax law can have major consequences for a client.
- Organization: Tax advisors launch and track multiple projects to meet deadlines and deliver quality results. The organization is key, as tax consulting often involves simultaneously working on multiple projects for different clients with varied deliverables and due dates.
Benefits of Hiring a Tax Consultant
1. Tax consultants can maximize your deductions: Consider hiring a tax professional to check your returns before filing if you utilize accounting software or an internal accountant to prepare your taxes. This individual will be knowledgeable about the most recent tax laws and regulations, and they could be able to spot overlooked deductions or provide advice for reducing taxes.
2. Tax consultants reduce filing errors: A capable tax consultant can rapidly identify computation issues or places where the tax accountant made blunders. Before filing, they will correct these mistakes, assisting you in avoiding IRS fines. A tax expert can also look through tax returns from previous years.
3. Tax consultants bring peace of mind if you’re audited: If your business is in danger of an audit, a tax consultant can give you advice and explain your options using their knowledge. They are better equipped to assist you in avoiding a tax audit or defending you during an audit because they have experience working and a solid understanding of tax law.
4. Tax consultants offer advice to help you make strategic choices: Decisions about ownership, investment, and compensation have positive and negative tax consequences. A tax consultant will share their knowledge and expertise and offer advice so you can make choices with the least tax liability.
Important Interview Questions
- What is your experience in tax accounting?
- What credentials do you hold?
- How do you keep your credentials current?
- Why did you choose a career in tax consulting and not another accounting field?
- What were some of the projects you completed in your past role?
- What financial information do you use to develop business metrics?
- How do you prioritize the various consulting tasks you're responsible for?
- What is your experience with accounting software?
- How would past clients describe you?
- How do you ensure the accuracy of your work?
Tips to Hire Tax Consultants
1. Choose a Passionate & Licensed Tax Consultant
You need an accountant who specializes in tax consultancy. Go for a tax professional who has undergone the relevant training and is licensed to provide those services. The CPA or Certified Public Accountant is the most sought-after and used credential in the world of accounting and for a good reason.
2. Look for a Candidate with Great Tax Education and Experience
A tax advisor’s education can make a huge difference when it comes to long-term tax savings. They should either be a certified or chartered accountant as the bodies to which they belong require them to uphold very high professional standards.
3. Find a Tax Consultant Who Thinks Non-Linearly
While most consultants think in straight lines, a better one finds practical and legal ways to use the law and save the taxpayer money. A well-trained tax consultant shall understand clients’ business and needs, and advise you in the best possible tax planning that minimizes your tax payments.
4. Hire a tax consultant who asks you questions
During the first interview with the tax consultant, if you are the one who asks all questions, this should be a red flag. However, you should look for a tax consultant who asks more questions and concerns about your business's long-term goals and your future financial road planning. A thorough diagnosis by a tax professional can lead to major tax savings.
5. Invest in the best tax consultant for Long-Term Gains
The important thing is not the fee that your tax advisor charges you, but it is how much they value you. A professional tax advisor could help you save millions over a lifetime, therefore it’s worth investing in a great tax consultant. With proper investment, it would lead you to gain more money in the long run.
A tax consultant advises and guides clients on tax-related matters. They work with individuals and organizations to ensure they comply with tax laws and help minimize potential tax liability. Tax consultants typically have a deep understanding of tax law and accounting principles.
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Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.
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