Samudrapom Dam

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Wise Choice of Tax Consultants can lead to Better Returns

'Nothing certain but death and taxes', an old adage that aptly summarizes the role of taxes on the lives of every individual. Dealing with an extensive array of taxes remains an indispensable task for common people. Understanding the implications of existing tax laws, and ensuring proper compliance of tax regulations are the major tax-related issues that are usually faced by an individual. However, handling these issues can be a time-consuming affair for an average taxpayer. Moreover, there are possibilities of false interpretation of tax laws by the taxpayers without any assistance from the experts. The situation can lead to incorrect filing of tax returns, and consequently creating further hassles for the taxpayer. Employing a tax consultant is essential for tax planning in a complicated tax life of an individual where income sources can include different sources such as retirement savings, real estate transactions, self-employment income, salary, rental income, and stock trading, with each source of income is subject to a specific set of tax regulations. These tax liabilities correspondingly impact the overall financial position of an individual. Thus, from an individual point of view, proper tax planning with the help of tax consultants is necessary for ensuring compliance with tax regulations, and conserving time which can be used productively for other purposes. Furthermore, tax planning through consultants can significantly reduce the tax burden as such experts can effectively leverage on relevant sections of tax regulations which have been implemented to provide monetary relief to taxpayers. Tax consultants can be very helpful in case an individual works and lives in different states or countries, have an active investing life, or running own business. Additionally, tax consultants can also offer valuable tax-related guidance to individuals for major life events such as marriage or childbirth, providing financial assistance to dependents (which include their parents), receiving inheritance, starting a new job, and buying a home. Hence, the role of tax consultants is crucial in tax-related issues, which increases the importance of appropriately selecting consultants who are best suited to handle such issues. However, individuals should consider certain aspects in order to select a tax consultant.
Thorough Authentication
Every person who gets paid to file tax returns on behalf of others or gives tax-related advice are required to be registered as a tax practitioner with an apex controlling body. Individuals should obtain registration-related information from their tax consultant. Subsequently, they should verify the registration by checking the membership with the controlling body. The bodies also keep tabs on tax practitioners by keeping records about their own tax compliance and involvement in any criminal activity. These bodies ensure that the consultants registered with them has necessary qualifications and skills to execute their jobs in a proper manner.
Look for the one who have good education and considerable experience in this job
A tax advisor’s education profile always makes a difference in his work profile. Consultants graduated from top universities should be preferred for the job. In case of experience, the difference is much wider. Specifically, the place where a tax consultant has gained experience is more significant. A consultant having a previous work experience at reputed accounting firms are more capable of handling complex tax issues.
Look for those with innovative problem solving approach and long term view
In most cases thinking out of the box helps in formulating a comprehensive tax-saving strategy. Although most consultants follow the traditional approaches, the better one's implement creative ways to use the law in order to save the money of the taxpayers. Presently, long-term tax planning is the buzzword for every individual. A right adviser will spend months for developing a lifelong tax strategy in order to create permanent tax savings.
Accustomed to electronic filing (e-file)
Tax consultants who are accustomed to e-filing to file returns should be preferred. E-filling has some inherent advantages that include faster processing of tax returns, which implies that taxpayers will get quick refund in case they are eligible for it; and filing errors in e-filed tax returns are comparatively lesser than manually filed tax returns.
Understand fees charging methodology
Individuals should know about fee calculation method of tax consultants before hiring them in order to avoid any disputes later on the issue. Although fees should be less for simple tax matters, they are generally higher for complicated tax issues. Ideally fees are charged based on the complexity of the tax return, and the time requires to prepare and file the return. Fees calculated on the basis of a percentage of the expected refund should be shunned, as such process may encourage data falsification for claiming more money as refund than the actual amount. This could further leave the taxpayers vulnerable to an audit or penalties.
Availability
Hiring a tax professional who can remain available on a regular basis can cost a little more but the cost is worth of the service. Such consultants are not only available during tax season for preparing returns, but also throughout the year. They know the latest tax laws and rules, and can answer questions and offer advice related to money-saving tax strategies such as informing the opportune time for selling different assets, and advising ways to realize all available deductions and credits.
Thus it is much more worthy for an individual taxpayer to have a good tax consultant to deal with tax related issues for greater tax savings and long term wealth creation. It may lead to investment, but an informed choice can lead to much better returns on that investment.