You may have noticed that I often refer to myself as a Tax Advisor rather than a Tax Preparer. Although I am a Registered Tax Preparer, I believe there is a major difference between those who refer to themselves as Tax Preparers vs. Tax Advisors. I have also recently come to realize that I might be confusing people. Just the other day when I posted about year end tax saving tips, I received an email with the question, “Is a tax advisor the same thing as a tax preparer?”
I figure if one person asked that question, there are probably many more that I’ve confused as well.
Here are the differences!
Short answer – Both Tax Preparers and Tax Advisors are “tax preparers” and can prepare tax returns, but a Tax Advisor provides many more services for their clients.
Long answer – If the only advice you are getting about reducing your taxes, or increasing your refund, is to change your withholdings and to contribute more to your retirement account(s), than you are most likely dealing with a tax preparer. If on the other hand, the person who prepares your taxes takes the time to meet with you, goes over your taxes, and educates you on ways to reduce your taxes now and in the future, then you are most likely dealing with a Tax Advisor.
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A Tax Preparer is best for people who want to have their taxes done as quickly as possible. A Tax Advisor is best for people who want to have their taxes prepared as efficiently as possible – while paying the least amount in taxes.
If you’d like to read more about a frustrating experience I had with a Tax Preparer when I was a teacher, click here. Not being educated almost cost me a couple hundred dollars that year!
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Here’s my breakdown on differences between Tax Preparers and Tax Advisors:
Tax Preparer
Prepares Tax Returns, usually in one quick appointment
Usually only available between Jan – April
Usually very limited advice on how to reduce income tax liability
Tax Advisor
Prepares Tax Returns, usually meets twice with clients to insure lowest tax liability.
Available all year
Provides personalized strategies to help reduce income taxes for years to come
Keeps in contact with his/her clients throughout the year
Provides personalized strategies to help maximize paycheck
Provides tax advice on issues like home ownership, retirement accounts, etc…
Provides financial advice
Considers tax implications now and in the future
Understands the whole “death and taxes” analogy more than any one person should
Is part of an Organization that promotes ethics
(Here’s my Professional Profile)
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I encourage everyone to educate themselves and find the right tax advisor for them. It’s almost always best to find someone who specializes either in your career field or business. Above all else, make sure you trust the person!
Do you have any questions? Would you like me to expand more on the differences? Feel free to comment below or contact me anytime.
Please keep in mind that all the information I post on this site is for general purposes only. I understand that every person’s situation is unique and should be treated as such. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.
Attention Teachers! In a future post I’m going to also discuss the differences between 403(b)/TSA Salespeople and Financial Advisors. If you’d like to make sure you receive that post and any other future posts from me, please subscribe to my email list.