Qualifications and Experience of a Tax Consultant
A tax consultant is a professional who helps individuals and businesses reduce their taxes by providing guidance, answers to questions and filing paperwork. They may also work with the IRS on behalf of their clients if there is an audit. These professionals often have more education and credentials than standard tax preparers, and most maintain continuing education to stay on top of ever-changing tax laws. Some also hold professional designations such as Certified Public Accountant (CPA) or Enrolled Agent (EA).
People use tax consultants for many reasons. Some want to minimize their tax liabilities, while others need assistance navigating the ins and outs of complex tax law. For example, someone who receives income from multiple sources—like a W-2 employee plus 1099 contractor earnings or equity shares of a company—may need help filing correctly and maximizing deductions. Others find themselves in situations such as a divorce or death that require them to change their tax status and make new filing requirements.
The qualifications and experience that a tax consultant needs to have vary depending on the complexity of the cases they handle. However, all have to meet minimum education and training standards set by the IRS. Tax consultants typically have an associate or bachelor’s degree in a field like accounting, business, finance or taxation. Some also have additional credentials, such as an enrolled agent certification, which is the highest credential that the IRS awards to tax professionals and requires experience as well as passing a three-part exam.
Other qualifications include a high level of organization and communication skills. These are important for managing large volumes of files and collaborating with other tax professionals on complex cases. In addition, they need to be able to understand tax laws and be able to explain them clearly to their clients in language that is understandable to non-tax experts.
Generally speaking, a person should consider hiring a tax consultant if their situation is too complicated for them to manage on their own, or if they feel that the services provided by a standard tax preparation service are insufficient. In particular, a person should seek out a tax consultant if they own a business or have multiple source incomes, are unsure about claiming certain deductions, need help filing in more than one state or are unable to navigate the complicated rules and regulations surrounding international taxation.
The best way to find a qualified tax consultant is through referrals from friends and family members who have used their services. Those who do not have personal recommendations should interview potential candidates to gauge whether they can trust them with their sensitive records and tax-related finances. Qualifications and certifications should always be checked, and it is a good idea to see examples of previous tax-related work. It is also a good idea to get an upfront fee estimate for the services to be rendered. In addition, a candidate should be licensed and insured. All of these criteria are important to ensuring the safety and security of a client’s financial information.Steuerberater
