CPAs, Tax Strategists, and Tax Preparers: How to Determine What You Need for Your Taxes

When searching for a tax professional, it’s important to know what exactly you’re looking for. From CPA, to Tax Preparer, to Tax Strategist— there are a variety of roles that work together to aid in your personal and business tax needs. Knowing what separates these professions can help you find a tax strategy team you trust, and it can also save you money.

What is the difference between a CPA, tax preparer and a tax strategist?

While anyone can do research and file their own taxes, there are significant benefits in trusting a tax professional to help you file. A CPA, Tax Preparer, and Tax Strategist may all sound like similar positions, but ultimately what each individual job entails is very different. All are essential members of your financial team.

Tax Preparer
A Tax Preparer is someone who focuses on the history of your taxes, typically around tax season. Their job is to take the historical information you give them (such as previous income and expenses) and use it to comply with tax filing requirements and follow all tax laws. While tax preparation is a crucial role of any professional tax firm,  it is important to remember that the focus is similar to that of a historian—rather than looking ahead and planning your future taxing needs.

Tax Strategist
A Tax Strategist is the one on your tax team who is thinking and planning ahead for your future taxes on an ongoing basis. They influence future outcomes by studying and focusing on changes that you could implement throughout the year to ultimately achieve more tax savings. There are many short- and long-term tax planning strategies that a Tax Strategist can recommend, which is why their role is very different from a Tax Preparer. Tax Strategists are planning for your tax future in more ways than just your current filing. They will work with you to ensure you achieve your financial goals and are wealth building for the future generations of your family.

CPA
A Certified Public Accountant (CPA) is a professional designation that accountants can receive to deepen their accounting knowledge and duties beyond those of a regular accountant. Many Tax Preparers and Tax Strategists are CPAs; however, not all CPAs venture into the world of tax strategy and tax planning. It’s important to remember to evaluate a CPA’s experience and background when hiring one for your tax preparation or tax strategy.

Benefits of Having a Tax Preparer and a Tax Strategist

Having both a Tax Preparer and a Tax Strategist reviewing your tax strategy is essential because they each provide separate duties and benefits. While the two often work together (especially if you go through a tax strategy firm, like Tax Savings Professionals), their separate duties ensure that you receive the most out of your tax plan, including the benefits below.

1. Helps Lower Your Tax Bill
Using a tax preparer in conjunction with a tax strategist will not only make your tax season a breeze, but it will help make sure you are saving the most and paying the least necessary. While the Tax Preparer dives into your current tax situation, your Tax Strategist will be planning for the future to ensure your tax bill remains as low as possible. Your Tax Strategist also will review your accounts more often than a Tax Preparer will, meaning you will have a better understanding of what is needed to save the most money when it’s time to file taxes.

2. Keeps Your Tax Strategy In Line with Tax Laws
Both a Tax Strategist and a Tax Preparer will be well-informed of any new or upcoming tax laws at both the federal and state level. Not only will this allow you to stay compliant with the law, it will often help you stay more tax efficient and prohibit mistakes being made that can be costly down the line.

3. Strengthens Your Wealth Management Strategy
Having two tax professionals look over your tax history and plan your tax future is one of the best ways to maximize your wealth management strategy. The more money you are able to save from paying unnecessary taxes can and should be repurposed into building your wealth. Therefore, having a team of Tax Preparers and Tax Strategists will only aid in growing your wealth management plan, from retirement, to estate planning, to investment management.

Bottom line: Think of Tax Preparers as the historians of your taxes, while Tax Strategists help you plan for your future taxes. Both roles are unique and crucial to maximizing your tax savings and ultimately growing your wealth.

Working with a tax strategy firm is a great way to save money while growing your wealth. At TSP Family Office, we have a team of Tax Strategists who are ready to aid in planning for this important aspect of your financial life. Check out our tax saving assessment calculator and give us a call today to learn more about our tax strategy solutions.