Numerous business owners and individuals struggle with tax management and need some advice from professionals or experts. A tax advisor can deal with all the queries of the individual or business related to tax laws and regulations.
A tax advisor plays a critical role in the growth and development of the company and makes sure that the company is compliant with all the tax regulations of the local, state and Federal government. The tax rates vary according to the net revenue generated by the company, and various other factors must be considered while filing tax returns.
A tax advisor may enlighten the business about deductions and claims that can help lower the business’s tax liability. They even ensure that the business or the individual does not match any deadlines related to taxation. The government declares strict deadlines for uploading tax-related documents and making payments, and any delay may lead to a penalty or critical auditing.
A tax advisor’s role is critical; therefore, one must be very cautious while hiring a tax advisor. You don’t need to figure out a very difficult interview process, but you must ensure that you are hiring a candidate with the relevant experience for the role and expertise in the required domain. If you are somewhat underconfident about hiring a tax advisor, you don’t need to worry, as you have our back! Let’s discuss some tips on hiring a tax advisor.
Table of Contents
How to hire a tax advisor?
Feeling the burden of tax-related problems and the need to hire a tax advisor, go through the tips below for hiring a suitable tax advisor for your firm.
1. Check the Preparer Tax Identification Number (PTIN)
Any person who files or assists in preparing federal tax returns for compensation must have a PTIN, as declared by the IRS. You may take down the phrase “for compensation” — any person voluntarily preparing or assisting in tax preparation doesn’t need a PTIN. The PTIN of the tax preparer should be mandatorily present on the income tax return of the individuals, according to the latest guidelines issued by the IRS.
2. Prioritise candidates having a CPA, law license or enrolled agent designation
It is pretty a mere task to get a PTIN; you may increase the bar and look for candidates who have recognised credentials. For instance, you may look out for a CPA, certified public accountant, licensed attorney, EA, enrolled agent, or someone who has cleared the Annual Filing Season program, the launch by the IRS.
The Accredited Business Accountant/Advisor and Accredited Tax Preparer are some of the pre-requisites programs for completing the Annual Filing Season Program criteria. Clearing any of these credential programs is not a piece of cake and requires a lot of consistent study and exams. Any individual possessing any of these credentials will possess deep knowledge of taxation.
3. Don’t prefer tax advisors who don’t e-file
According to the latest guidelines issued by the IRS, any tax advisor who prepares more than ten tax returns for clients in exchange for compensation is liable to file a return electronically using the e-filing system of the IRS department. If the tax advisor himself doesn’t use the e-filing portal for filing the return, he is not cautious.
This indicates ignorance and unawareness about the latest rules of the IRS department. You must re-consider the application of such candidates and advise them to be clear with their tax liabilities first.
4. Look for a CPA who thinks out of the box
Most accountants go by the book and have a straight thinking pattern, but the best ones brainstorm (within the legal barriers) on ways to use the law to save taxpayers money. Inexperienced accountants recommend deferring taxes through an IRA or 401K and paying your expenses upfront at the end of the year.
The most experienced and dedicated tax advisers find a way to save taxes on a long-term basis and ensure a stable result. There is a difference between knowing stuff and implementing the stuff that you know, a tax advisor with decent years of experience can add a lot of value to your firm.
We know there are times in the business when you feel confused, especially when you are stuck with any tax-related query and don’t come from a financial background. You don’t need to worry or panic in such cases; there are several tax advisors out there who can assist you in resolving any tax-related query.
You may even hire a tax advisor on a contractual basis, any touch trouble and make sure that you don’t miss out on any deadline or pay any penalty because of tax laws. Dealing with taxes is challenging; analogously, hiring a tax advisor also needs critical attention. Just keep calm and follow the tips mentioned above and you can hire a knowledgeable tax advisor for your firm and watch out for great results.