Why Should I Hire a Tax Accountant for My Business?

What is the role of a tax accountant?

A tax accountant is responsible for filing taxes, monitoring compliance, and analysing tax issues - each of which are vital to running an efficient business. Tax accountants are experts in the field of tax law and strategy, providing clients with the most up-to-date advice on how to save money on taxes. These individuals typically will specialise in either individual or corporate tax-related services. As such, their job responsibilities may involve preparing documents to file taxes, developing strategies to minimise tax liability, and keeping up with changes to tax regulations. In addition, a tax accountant may serve as an adviser to a client concerning their financial situation.

If you or your business has a complicated tax situation, then hiring a tax accountant might be a huge help. Not only can tax accountants assist with identifying tax deductions so that you can save money, but they can also provide career and life advice that relate to your taxes. This will ensure that you are making smart decisions when it comes to your finances.

What are the four types of accountants?

Accounting can be separated into four distinct categories or branches: corporate accounting, public accounting, government accounting, and forensic accounting. Below is a detailed look at the intricacies of each area of accounting.

Corporate accounting deals with the financial functions of companies, such as preparing financial statements, maintaining assets, and dealing with day-to-day transactions. Working on the daily operations of a business in relation to their expenses and revenue is one of the main pillars of corporate accounting. Another part of corporate accounting is a deep analysis of specific projects within the company to identify whether they are an intelligent use of company money, effort, and time. This goes for both private and public businesses.

To put it in simple terms, public accounts can be seen as accountancy firms which work with external clients such as businesses, non-profit organisations, government organisations, individuals, and more. Some public accountancy firms are just a handful of workers, and some can be huge, with several hundred employees. Public accounting incorporates tax preparation, audit services, estate planning, wealth management, and bookkeeping. They may also act as consultants for businesses during mergers and acquisitions, as well as offer advice on accounting systems.

The main role of a government accountant is to review various pieces of financial documentation for the government itself, as well as the nation's taxpayers. Government accountants are a critical part of the financial and budgeting sectors of the government. Work sometimes requires government accountants to investigate the financial accounts of government agencies to ensure that there have been zero signs of fraud or wrongdoing when it comes to the budget. Government accounting also includes auditing at national and countywide levels.

Forensic accounting is a unique type of accounting that involves investigating financial discrepancies. All forensic accountants are CPAs (certified public accountants) who use their accountancy skills to investigate a person's or whole organisation's potential financial crimes. They will usually work for a law enforcement team, a financial institution, or an insurance company.

What is the difference between an accountant and a tax accountant?

It is common to see accountants and tax accountants thrown together into a singular category. Many people can get confused over what the differences are between these two types of finance professionals. Even though both accountants and tax accountants can provide their clients with guidance when it comes to their finances, the roles are certainly not the same. This is important information to know if a time comes when you need the services of either one or both of these professionals. Accountants and tax accounts play pretty different roles when it comes to the management of finances on both a corporate and personal level.

There is a big difference between a Certified Public Accountant (CPA) and a Licensed Tax Accountant/Advisor/Preparer. A CPA is a licensed professional with extensive education and experience. They can provide tax advice, financial planning advice, and general business consultation. On the other hand, a Licensed Tax Preparer only has the legal authority to prepare income tax returns and does not have the same knowledge or experience as a CPA.

Do all accountants handle taxes?

No, not all accountants handle taxes. There are generally four types of accountants: public accountants, corporate accountants, government accountants, and forensic accountants. Public accountants specialise primarily in tax-related services, while corporate accountants focus on the financial functions of a company. Government accountants are responsible for auditing both federal and state levels, while forensic accountants investigate financial discrepancies. Each of these types of accountants has a different specialisation, and some may not necessarily include tax services.

If you require a specialist in taxation, then it is advised that you speak with a tax accountant, sometimes known as a tax adviser. These are financial experts who generally used to be accountants but have since specialised specifically in taxes. The level of knowledge when it comes to taxes here will definitely outweigh anything that you could receive from a general accountant, so if you are dealing with a complex tax situation, then this is the way to go. Laws and rules when it comes to tax are complicated and multitudinous; for a general accountant, it is unreasonable for them to learn all the ins and outs when it will very rarely apply to their work. This is why specialist tax advisors exist.

Why Hire a Tax Professional?

There are many reasons why one may want to hire a professional tax service. Firstly, it can save you a lot of money. Even if your newly hired tax professional only finds a single tax credit or deduction that you would have usually missed, then the money that will be gained will definitely be larger than the fee to hire the professional tax preparer in the first place. Of course, hiring a professional tax advisor will also save you a lot of time. On average, it can take over four hours to complete a tax return, and that is assuming that you know what you are doing well completing the documents. Another big help that tax professionals bring is being able to ask them any questions or have them solve issues you might have that relate to your taxes. Unfortunately, contacting HMRC for answers can mean spending hours on hold. Tax professionals will be able to answer most of your questions instantly.

A benefit to hiring a tax professional that should never be overlooked is the simple pleasure of having peace of mind knowing that all your taxes are being handled by an expert. Tax code is very complicated, and it only becomes more and more complex each year as new regulations come into play. Tax professionals will be up to date with all changes made, so you don't have to worry about breaking any rules or submitting your taxes incorrectly. Finally, paying for a tax professional means that you are given the opportunity to look back and review any previous tax returns. Hiring a qualified tax professional is often the best way to ensure you are getting the most out of your taxes and can save you money in the long run.