5 Tips for Finding the Tax Advisor Who Will Save You Millions Death and taxes remain certainties but there is a lot you can do to live longer and pay less.
By Tom Wheelwright •
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One of the most important things an entrepreneur can do to protect their wealth is to find a not-just-good-but-great tax advisor, because a the right advisor can save a business owner literally millions of dollars over a lifetime.
While most businesses only talk to a tax advisor once or twice a year, great tax advisors have regular strategy meetings with clients to discuss goals and approach. They are passionate about both the tax laws and the client's future. Here a five tips for recognizing the tax advisor to partner with.
1. Find a passionate CPA versus a mass-production company.
The best tax professionals are always CPAs, Certified Public Accountants. Most business owners should use a CPA because these professionals are the most knowledgeable and passionate about reducing taxes. The second option is an enrolled agent, and finally, there are the mass production companies like you find in the mall. Some very small businesses can get by with an enrolled agent. Business owners and serious investors should never use a mass production company or do their own taxes.
Related: 10 Questions to Ask Before Hiring a Tax Accountant
2. Look for a CPA with great tax education and experience.
A tax advisor's education can make a huge difference in long-term tax savings. For example, the best CPAs graduated at the top of their class from top universities, worked for a Big 4 Accounting Firm (Price Waterhouse Coopers, KPMG, Deloitte & Touche and Ernst Young) and embrace the details in the law.
Related: 3 Red Flags That Your Tax Accountant Is an Idiot
3. Find a CPA who's thinking is nonlinear.
While most accountants think in a straight line, a better accountant finds creative (and legal) ways to use the law to save the taxpayer money. Unsophisticated accountants will recommend that you postpone your taxes through an IRA or 401K and pre-pay expenses at the end of the year. The right accountant will spend months with you developing a lifelong tax strategy to create permanent tax savings.
Related: 10 Questions to Ask When Working With an Accountant
4. Hire a tax advisor who asks you questions.
If you have to ask all the questions during the initial interview, this should be a red flag. Instead, look for a tax advisor who asks more questions about your long-term goals and financial dreams. Only a thorough diagnosis by a tax professional will lead to major tax savings.
Related: Getting the Most From Your Accountant Means More Than Just Doing Your Taxes
5. For long-term gains invest in the best tax advisor.
In my "Tax-Free Wealth" book, I emphasize, "It's not how much your tax preparer charges you that matters, it's how much your tax preparer costs you." If you can save millions over a lifetime, it's worth the investment in a great tax advisor. For example, my company, ProVision, worked with one client to reduce their taxes by $70,000 each year with a solid tax strategy. The result over the long-term was more than $2 million in savings. Properly invested, this could mean $4-5 million added to their portfolio.
Hiring a great tax advisor is one of the most important decisions you will make as a business owner or individual. Look for a CPA who is interested in educating you on the rules and reducing your chances of an audit. The tax law allows for great flexibility in how you own your business and structure your transactions. Bottom line, find a great tax advisor who knows what the tax law means and how to save you millions over a lifetime.
