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How to Find a Tax Advisor

As your small business grows, your taxes can get more complicated. Maybe you’ve gotten your bookkeeping and accounting under control, but still have some persistent tax questions that you need answered. A tax advisor can help—but how do you find the right one?

A tax advisor is a financial expert with advanced knowledge and training in tax accounting and tax law. They provide advice on strategies to help you save on taxes that you likely wouldn’t find on your own.

Here, we break down how a tax advisor can help you and how to find one who’s a good fit for your small business.

What makes someone a tax advisor?

The term “tax advisor” is often used interchangeably with tax consultant, tax preparer, and tax accountant, but these professions are not exactly the same. Let’s take a closer look at what each of them means, and the different ways they can work with you.

A tax advisor (also referred to as a tax consultant) advises business owners on complex tax situations and help businesses minimize their tax liabilities. Examples of when you might want a tax advisor are if you were starting a new business, selling an existing one, or managing multiple assets.

There are a few types of certified tax advisors who meet additional skill, education, and expertise requirements set by the IRS: a certified public accountant (CPA), a tax attorney, and an enrolled agent (EA). If you’re looking for a tax advisor, search for a professional who carries one of these titles.

A tax preparer can prepare, calculate, and file business or individual tax returns. Along with these basic services, a tax preparer can also represent you before the IRS, including audits and tax court issues. To file your tax returns or represent you, they must register and obtain a preparer tax identification number (PTIN).

A tax accountant is regulated by the Internal Revenue Code, or the specific tax laws that you have to follow when filing your income tax return documents. You can also seek help from a tax accountant during tax season to reduce or delay your tax payments while remaining compliant with IRS laws, guidelines, and regulations. (It’s important to flag here that not all accountants are CPAs, but all CPAs are accountants.)

Further reading: Choosing a Tax Advisor: Everything You Need to Know

Anyone can be a small business tax advisor. A specific license for tax advisors doesn’t exist—instead, all one needs is an IRS-issued PTIN.

All enrolled agents and preparers who plan to file tax returns for paying clients must legally obtain a PTIN. They can apply for a PTIN online in less than 20 minutes through the IRS website, or complete and mail in a paper Form W-12, which can take four to six weeks to process.

So, job number one is to carefully do your research and not rush the process. Ask for professional credentials and experience to ensure they’re right for your unique tax situation.

Tax scams are on the rise, so you need to take extra precautions before handing over your personal and bank account information to anyone who could use it to steal your money or your identity.

As you go through the selection process, ask yourself: Does the tax advisor seem knowledgeable and leave you feeling confident? How many years of experience do they have? Would they be able to represent you in front of the IRS? And finally, how comfortable would you feel taking this person’s advice?

How do you find the right tax advisor for your business?

Now that you know what qualifications you need, let’s look at where you can find a tax advisor who checks all your boxes.

  • Personal referrals. Ask friends, family, or business associates you use and trust for recommendations. Also, check your local Better Business Bureau for reviews and ratings.

  • Professional associations. Check local bar associations and CPA societies. You can search for a CPA online at The National Association of Enrolled Agents can assist you in locating an EA (which is a good choice if you owe back taxes).

  • IRS public directory. The IRS keeps a public directory of PTIN holders who also hold professional credentials such as CPA or EA. It includes attorneys who specialize in tax preparation and planning, as well as preparers who voluntarily complete a continuing education program every year. Check your referrals against this directory, and avoid working with anyone not listed there.

  • Check with your business accountant (like Bench!) If you need more than just your monthly bookkeeping and annual tax filing, Bench also offers unlimited tax advisory support to help you navigate tricky tax questions, back tax situations, and more.

How can a tax advisor benefit your business?

With the help of an experienced, credentialed tax advisor, you can save plenty of money that you would have otherwise had to pay to the IRS.

It makes sense—the average taxpayer may not be aware of the tax breaks and trap doors buried in the complex and often confusing U.S. tax code, which spans tens of thousands of pages. But for professional tax advisors, it’s their job to know.

A tax advisor can deliver a variety of services, including one-time tax consultation, full-service tax preparation, and defense of your tax return in case of an IRS audit. Here’s a closer look at those services.

Preparing your taxes

Complex business situations like taking on investors, growing your business, acquiring another business, or changing your business structure can complicate your taxes. It may be necessary to seek ongoing tax advice in some situations, while others may require only one-time help. Having a tax pro on hand can help you avoid making mistakes or owing more than you planned.

Help lower your tax bill

A tax advisor may find deductions and credits to lower the tax payments that you or your software missed, and draw attention to audit triggers or red flags that could get you into trouble with the IRS.

Dealing with the IRS

If you’re dealing with the IRS on your own, your tax advisor can offer you guidance on how to handle your situation. But if you need representation, an attorney, CPA, or enrolled agent can represent you before the IRS so you don’t have to go it alone. A good tax professional knows how to manage the IRS bureaucracy.

Planning for taxes in retirement

Different retirement savings options are available to self-employed business owners than to salaried employees. Your tax advisor can assess your overall portfolio and help you choose the perfect blend of retirement and other financial accounts that can help you preserve your wealth and reach your long-term goals.

Guide you through a major business event

Some business events can trigger one-time or ongoing tax changes, like starting, closing, acquiring, or merging a business. Tax advisors are well-versed in navigating the ins and outs of infrequent life and business changes that may impact you.

Creating a long-term tax plan

Tax planning is a complex, comprehensive process that’s different from preparing taxes. Think about it like this: tax preparation is like a final exam, while tax planning is all the studying you do to prepare for it.

Tax planning requires the guidance of an experienced tax advisor to help you look into the future and develop both long-term and short-term financial plans to minimize your tax bill. That’s more money in your pocket to put toward other financial goals like paying down a house, saving for retirement, or taking a vacation.

Many tax laws differ from region to region, and certain regulations apply to certain scenarios and types of businesses. That’s why it’s wise to put your tax planning in the hands of a tax professional with specialized knowledge in tax law.

Further reading: Is a Tax Advisor Worth It?

How Bench can help

If you need one-stop bookkeeping and tax support, Bench can help. Your Bench bookkeeper can provide you and your tax advisor accurate, up-to-date financial information so that you can make better budgeting, forecasting, and tax filing decisions.

Streamline your financial management with Bench’s tax-specific services. When you upgrade your monthly bookkeeping plan, you can benefit from our personalized tax expertise, including unlimited tax advisory, one-on-one tax strategy planning, and annual tax filings for your business. Learn more.

The bottom line

If you’ve decided that your business tax return is just a little too complicated to handle on your own, or if you don’t have time to deal with all the rules and tax forms, you’ll likely be better off working with a tax expert.

Whatever your current business finances look like, there’s a tax advisory service out there that’s the right fit for your goals. It can save you time, reduce stress, prevent you from making mistakes, and uncover tax savings even the best tax software might not find.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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