Benjamin Franklin once said, "in this world nothing can be said to be certain, except death and taxes." While taxes are inevitable, there are plenty of strategies advisers can implement to legally reduce and eliminate taxes. In fact, entrepreneurs, business owners, and investors have the upper hand when it comes to taxes, as tax law provides many incentives for these specific groups. Does your adviser have the right qualities to help you reduce your taxes? Here are a few qualities to look for:
1. They use a system to reduce taxes
A knowledgeable tax adviser knows that 5,770 of the 5,800 pages of tax laws are dedicated to reducing your taxes. This means that rather than claiming the standard deductions, they have the knowledge and tools to create and implement strategies that permanently reduce or eliminate taxes, so you can maximize your long-term wealth. An adviser with this approach will analyze your business or portfolio to create a custom tax strategy, not just simply file your return.
2. They aren't afraid of the IRS
Audits aren't ideal, but they do happen, and when they do, your adviser must be ready to take them on for you. During an audit, you should leave all IRS communication to your adviser and feel confident in doing so. In fact, ask to see examples of how they have handled audits in the past to get a feel for how they work.
3. They want to teach you the tax law
Rather than educating you to make the best decisions, many advisers avoid teaching their clients the law because they believe that if they do, you won't need their service anymore. A great adviser knows there are business and investment decisions that can and will impact your tax burden. More knowledge to make smart decisions means a decrease in your taxes, a more successful business, and, in the end, more work for your adviser.
4. They want to know everything about you
To create the most effective strategy, your adviser needs to know everything about you and your business. You may be wondering why your personal life plays a role in your taxes for your business, but the two go hand in hand. Your relationship with your family, your investments, and more all play a role in the larger picture of your tax strategy. Make sure your adviser knows the ins and outs of your life.
A great tax adviser is a key member of your team who has the power to change not only how you view taxes, but to eliminate them, too. Be sure to do your due diligence and find the best fit for you and your business.