Many people believe their CPA plays the same role as a tax professional would. But they actually play two very different and distinct roles. Both are important and you need both. The distinction comes down to the roles they each play in your financial welfare.

Your CPA is typically the person who prepares and files your tax return. Based on the documents you provide, he or she will calculate, file and sign your income tax returns on your behalf. Your CPA will also make sure any tax reporting on your return complies with federal and state tax laws. Generally, you will only see your CPA once or twice a year as tax time draws near.

Your Tax Professional usually works in conjunction with your CPA but provides a separate service from tax preparation – tax planning.

The U.S. Tax Code is 2,600 pages long. When the accompanying explanations and past tax statutes are added in, the length grows to up to 70,000 pages. Within those pages are pitfalls and tax breaks that the average layperson would not recognize, but a tax professional possesses the proficiency and education to understand and navigate both the pitfalls and windfalls.

Tax planning is a year-round process that can help to minimize your tax liability for the year by planning ahead. Through the process, your tax professional can guide you to tax-advantaged money recommendations – both for you personally and your business – in key areas such as retirement, estate planning, investment management, and small business planning.

Having both a CPA and a tax professional is something that most taxpayers do not take advantage of – but should. By reviewing your past and current accounts on a regular basis, you and your tax professional will have a better understanding of what you can do to save money this year and on next year’s tax return when you again meet with your CPA.

TSP Family Office works with your CPA to ensure you save more of your hard-earned money by using the tax-advantaged strategies found within the Tax Code. To learn more, call us at (772) 257-7888.