How to Choose the Best Tax Consulting Firm

The need for tax consulting:

As a wag once famously said, “The only things certain in life are death and taxes.” Though this remark was aimed at individual men and women, it applies equally well to all business enterprises, big or small, who have an obligation to file their tax returns year after year with the IRS.

In the early stages of life, as a young man or woman, you might have considered this annual ritual of filing a 1040 EZ return as little more than a nuisance. But, with the changes in your marital status, children, and natural growth in your business, assets and income levels, this mandatory preparation and filing of tax returns becomes more complex and calls for more tax consulting expertise. It is at this stage that you will feel the need for outside help and start searching for a qualified and experienced consulting firm.

Tax laws keep changing very frequently and it is virtually impossible for an ordinary person to keep pace with these changes. Preparing and filing your tax returns by yourself is fraught with many hidden dangers as you can never be fully conversant and up to date with all the relevant rules and regulations. A qualified and experienced consulting firm will relieve you of much of this anxiety. Though there are some costs involved in availing of tax consulting services, it will be easily compensated by your legitimate savings in tax payments and by way of refunds you can claim.

Search for a consulting firm:

• The easiest and most obvious source is word- of-mouth recommendations from your friends and associates who have had previous experience with tax consulting

• From the website of the National Association of Tax Consultants (NATC)

• From the directory of Certified Public Accountants –

After making a short list of potential firms, get more specific particulars from each of these entities. Follow up on this with personal interviews with the firms and verifying their references. You can also check up on their previous history and performance by referring to professional bodies like NATC and the Better Business Bureau.

Qualifications for tax consulting services:

Members of consulting firms have different kinds of qualifications like CPA (Certified Public Accountant), ATA (Accredited Tax Advisor), ATP (Accredited Tax Preparer), or combinations of these.

They also specialize in different areas of tax consulting like accountancy, tax planning and preparation, tax dispute settlement, etc. You should choose a specialist to suit your own specific needs.

If you are a start-up company, your consulting firm will have the added responsibility of advising you on many aspects of your business, such as:

• Help you determine the form of business most suitable for your company
• Inform you when different taxes are due for payment and set up systems which will automatically take care of this process
• Inform you regarding what qualifies as “gross income” which is what the IRS is mainly interested in
• Update you regularly on changes to the tax code and which expenses will qualify as legitimate business deductions.

Rather than hire a consulting firm at the end of each financial year, you should consider making a long term contract with it so that tax planning becomes a part of your business strategy. This will help you to take advantage of tax savings wherever possible and keep a check on your tax liability, which will ultimately maximize your profits.

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