What is a Tax Consultant and Why Would You Need One?
Because it is an extra expense, most people do not acquire the services of a tax consultant. However, an expert in the field of taxes can save you more than you would invest in their services.
What Is a Tax Consultant?
A tax expert is sometimes called a tax advisor; there are also enrolled agents and certified public accountants that also fall under this description. It is important not to confuse a tax preparer with a tax consultant, a tax preparer may not have been aware of every aspect of tax law, they are best at handling the uncomplicated paperwork for taxpayers, as well as necessary things as when itemizing deductions were processed, etc.
One of the good reasons to hire an expert in the tax industry is due to the amount of pages found in the 1040 forms instructions, in 1940 there were only two pages, in 2013 it reached 207. In its entirety, the U.D. tax code recently reached 3.7 million words; this is a lot of detailed and complicated information to go over and appropriately fill out. It may differ slightly in the UK.
If it is time to pay your tax returns, it may be an excellent idea to consider employing the services of a qualified tax consultant to assist you. It is also a good idea to use tax-prep software; you can expect fewer errors than when your tax return is filled out by hand, having said that, a qualified tax consultant will still do a better job than any modern software could.
Who Would Need To Hire a Tax Consultant?
It would do most people good to hire a qualified tax adviser; this stands to be even more true for those in particular circumstances. It is evident that if your tax life is a bit complicated such as with real estate transactions, income from being self-employed, revenue from properties being rented out, retirement savings accounts, stock options, a home office, etc. hiring a qualified tax consultant could be key.
Other situations when hiring a qualified tax consultant would be helpful would be if you have to work and or live in various states or even countries, if you are looking to buy your own business, run a business or sell a business or if you are an active investor.
Another good time to hire a tax consultant will be if there have been any major life events. These events include marriage or divorce, having to look financially over dependants such a parents, the adoption of a child if you are widowed, or receive a sudden inheritance if you are buying or selling a home, and have lost a job or if you are just starting a job.
Not only is a tax consultant useful during the actual tax season, during that time they can help to prepare your return. However, they can be very helpful during the entire year. They are up to date with all the latest rules and regulations. They also have the most recent tax scoops and can offer advice as well as tax strategies which will save you money such as precisely when to sell certain assets, how to take advantage of all the credits, deductions, etc. they can also address any tax related questions and concerns you may have.
Make sure that before you hire a tax consultant, you inquire about their educational background, certifications, licenses, and affiliations, and you should also ask for references. If the tax consultant prepares your tax return, inquire as to what would happen in the case of being audited. The most important thing is that you feel comfortable communicating and working with the tax consultants you are considering hiring.
Do not be misled and believe that tax experts are for the wealthy and famous and you are not in need of one. It may cost you a sum of money to hire a tax advisor, but it could save you thousand or even more on a simple tax mistake.…