Tax Planner vs. Tax Preparer

Holly: Today we’re talking about tax planning. Daniel what is the difference between a tax-preparer and a tax-planner?

Daniel: Well sometimes a tax preparer is also a good tax planner, but most often, the person preparing your taxes is simply inputting the data from what happened with your taxes last year, whereas a good tax planner is helping you plan for what will happen with your taxes this year. One is reactive, whereas the other is proactive.

Holly: So who typically is a good tax planner?

Daniel: A CPA, or CFP professional, or enrolled agent may be a good tax planner, but they may also just be acting as a tax preparer. It’s really difficult to make sure that you’re getting the right advice so consumers really need to educate themselves on the lingo and what types of questions they should be asking.

Holly: And what would be some good questions to ask your tax preparer/planner?

Daniel: Some good questions would be: should I do a Roth conversion this year? How can I lower my tax bill going forward? How can I keep my taxes and Medicare expenses down? Should I max out my 401(k)? Should I max out my HSA? Can I put money in an education fund for my kids? Can I lower my taxes by giving to charity? Can I sell some stocks for a loss?

Holly: It sounds like there are many benefits to working with a knowledgeable tax advisor such as yourself. What would you say is the biggest advantage?

Daniel: It’s being able to sit across the table from someone and ask, “what should I be doing? Or what do you know that I don’t know that can help me lower my taxes?

Holly: Wonderful, if you’d like to reach out to Daniel with tax questions, you can reach him at (540)580-2501 or via email at daniel@upwardfp.com.

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When Daniel is not giving financial advice or managing investments, he enjoys renovating properties, real estate investing, drinking coffee, hanging out with friends, spending weekend trips in his camper van, and exploring the outdoors on a hiking or biking trail in his hometown of Roanoke, VA and beyond.