Hiring a Tax Consultant? Here’s 9 Things You Should Look For…

Are you Paying Too Much Tax? A tax Consultant Can Help.

If your tax strategy is ‘file and forget,’ you’re leaving money on the table (possibly thousands). The solution? Hire a tax consultant.

Did you know that the right tax consultant can actually grow your business?

Tax regulations, deductions, and incentives are always changing.

A tax consultant can help identify specific areas for you to save on taxes.

For example: did you know that in Australia, if you pay your staff superannuation late, it’s no longer tax deductible? And you have to pay interest on it for every day that it’s late?

That means, if your staff superannuation expense is $50,000 per year, the tax bill is $12,500 if it’s paid late.

Ouch. Not fun, right?

But so many business owners don’t know this.

(And their accountants aren’t telling them either).

So they keep on paying excess taxes that eat into their profits and cash flow.

It’s no wonder so many businesses are struggling. Especially with the rise in cost of living and materials prices around the world.

Thankfully, a tax consultant can help. They’ll review your personal and business finances, tax situation, and create a custom-fit solution to help you pay less tax (legally).

A great tax consultant doesn’t just keep you compliant; they help you strategise, save, and grow.

Here’s a guide on what to look for when choosing a tax consultant (or a tax agent), including essential skills, traits, and practical advice to help you find the best consultant for your business.

What is a Tax Consultant?

A tax consultant is a specialist in tax law and financial strategy who provides advice to individuals and businesses on tax issues.

Unlike a general accountant or bookkeeper, tax consultants have advanced knowledge in specific areas of tax, and are often experts in tax minimisation, compliance, and financial planning.

Tax consultants offer a wide range of services, including:

• Tax Compliance: Ensuring all tax filings, returns, and obligations are met accurately and on time.
• Tax Planning and Strategy: Helping you optimise your tax position by identifying deductions, credits, and other savings opportunities.
• Risk Management and Audit Support: Minimising the risk of errors and representing your interests in case of an audit or dispute with the Australian Taxation Office (ATO) or Internal Revenue Service (IRS).
• Business Structuring and Investment Advice: Providing guidance on structuring your business or investments in a tax-effective way.

Why Work with a Tax Consultant?

There are many benefits to working with a tax consultant:

• Reduce Your Taxes: A tax consultant knows the ins and outs of deductions, credits, and incentives. They work to lower your overall tax bill and keep more cash in your business.
• Offering Expert Advice on Business Growth: Tax consultants provide strategic insights that support sustainable growth, such as advice on mergers, acquisitions, startup funding, or other significant investments.
• Minimising Audit Risk: Their expertise ensures your tax returns are accurate, complete, and compliant, reducing the chances of an audit.
• Saving Time and Reducing Stress: Tax consultants handle complex tax matters so you can focus on running your business without the added pressure of navigating tax law on your own.

What To Look For in a Tax Consultant

Finding the right tax consultant means looking beyond qualifications alone. Here are the skills that set the best tax consultants apart.

1. In-Depth Tax Knowledge and Qualifications

• Educational Background: Look for tax consultants with degrees in accounting, finance, or tax law. Additional certifications (CPA or CA) indicate a higher level of expertise and knowledge.
• Specialisation in Tax Law: Tax consultants with specific training in tax law or advanced taxation can provide specialised advise to certain industries and businesses.
• Understanding of Current Tax Laws: A good tax consultant is up-to-date with changes in tax regulations and can provide relevant advice. Changes in tax law can impact deductions, compliance, and opportunities for savings, so current knowledge is essential.

In Australia, tax consultants have to be registered with the TPB. However, in other countries, tax consultants don’t necessarily have to be registered.

Be sure to check credentials and qualifications before working with a tax consultant, especially internationally.

2. Analytical and Strategic Thinking

• Problem Solving: Great tax consultants analyse your financial data, and offer tax-saving opportunities, ways to cut expenses, and can advise specific tax strategies that suit your business. They should be able to look at your financial position from a high level and a micro level to find opportunities.
• Attention to Detail: Tax law is complex, and small errors can lead to significant costs. A good tax consultant is detail-oriented, and ensures nothing is missed when it comes to your compliance and tax planning.

3. Industry Knowledge and Experience

• Experience with Your Industry: Different industries have unique tax needs. A tax consultant will know the specific deductions, credits, and regulations that apply to your sector, whether you’re in hospitality, real estate, or tech.
• Familiarity with Business Sizes: Find a tax consultant who regularly works with businesses of your size—whether you’re a startup, an SME, or a large corporation. That way, they can give you relevant, actionable advice.

4. Proficiency with Financial Software

• Tax and Accounting Software: Tax consultants skilled in platforms like Xero, MYOB, or QuickBooks can help with interpreting your financial data.
• Automation: Advanced tax consultants know how to use automation for filing, expense tracking, and document organisation, helping your business become more efficient. Automation reduces human error and allows for better, more accurate tax preparation.

5. Clear and Effective Communication

• Explains Complex Concepts Simply: Tax consultants should be able to explain complex tax issues in simple, clear language. That way, you understand the implications of their advice, and you can make informed decisions for your business.
• Transparency and Honesty: Look for a consultant who is upfront about risks, costs, and potential outcomes. Honesty is essential for building trust, especially when dealing with something as important as taxes.

6. Proactive Approach

• Advises Ahead of Time: The best tax consultants don’t just respond to your questions—they actively monitor tax changes and advise you before issues arise. This proactive approach can help you avoid missed deductions, penalties, or compliance issues.
• Long-Term Implications: A good tax consultant considers the bigger picture, such as how tax decisions will impact your business in the long run. Their goal is to help you create sustainable, long-term tax strategies that grow with your business (while helping you pay less tax).

7. Adaptability and Flexibility

• They Adjust to Your Needs: Tax issues can arise quickly, and a flexible consultant can adapt their strategies to new developments, whether it’s a change in ATO / IRS regulations or a shift in your business’s structure.
• Customised Advice: A great tax consultant tailors their services to your business’s specific needs rather than offering one-size-fits-all solutions. They work with you to achieve your business and financial goals.

8. Strong Ethical Standards

• Commitment to Compliance: Tax consultants should prioritise legal compliance in every recommendation and action they take. They should offer ethical advice, avoiding risky, illegal, or questionable practices.
• Confidentiality: Your tax consultant will handle sensitive financial data, so trust and confidentiality are paramount. They should respect your privacy and have measures in place to keep your information confidential.

9. Reliability and Responsiveness

• Consistent Availability: Tax questions can arise unexpectedly, and you’ll want a consultant who is accessible and responsive, especially during tax season or when facing an urgent issue (not someone who takes 3+ days to reply to your emails).
• Meets Deadlines: Taxes need to be lodged on time to avoid penalties and interest. Make sure you work with a dependable tax consultant who adheres to deadlines and keeps you on track.

How To Find A Tax Consultant

It’s important to find the right tax consultant for your business. Someone who “gets” you.

Finding someone who feels like a good fit can take time, but it’s well worth the effort.

1. Seek Recommendations and Reviews

• Referrals from Your Network: Ask your colleagues or business friends if they have a contact for a reliable tax consultant. Find someone who specialises in businesses similar in size / industry to yours.
• Online Reviews and Testimonials: Platforms like LinkedIn, Google Maps, or industry forums (even Reddit) can help you find a tax consultant. Check the reviews to make sure they’re legit and can advise on your specific situation.

2. Check Their Credentials and Experience

• Confirm Qualifications: Verify their educational background, certifications, and registration with the TPB or IRS (enrolled agent). This ensures they’re qualified to give professional tax advice.
• Past Experience: Discuss their past work with businesses similar to yours. An experienced consultant will likely have case studies or examples that demonstrate their ability to handle complex tax situations.

3. Conduct Interviews and Ask Questions

• Test Their Knowledge: During initial consultations, ask them to explain a complex tax concept. This helps you gauge their communication skills and willingness to educate you on tax matters.
• Ask for a Strategy Sample: Request a sample tax strategy they’d recommend based on your industry. This gives insight into their thought process and approach to problem-solving.

4. Review Pricing Structure and Transparency

• Understand Their Fee Structure: Most tax consultants charge hourly or project-based fees. Clarify the cost of specific services upfront, whether it’s tax planning, filing, or audit support, to avoid surprise bills.
• Consider Value for Money: While tax consulting can be an investment, a great consultant should more than pay for themselves through savings, efficiency, and long-term tax benefits. Cheaper isn’t always the answer—focus on the value they can bring.

5. Look for Long-Term Compatibility

• Assess Cultural Fit and Values: Tax planning is ongoing, and the right consultant will work closely with your team for years. Assess whether they share your values of transparency, integrity, and a commitment to your business’s success.
• Evaluate Your Comfort Level: Trust your instincts. If you feel uncomfortable or have doubts about a consultant’s approach, keep looking. The best tax consultants are those you feel confident partnering with over the long haul.

Want To Know More?

Thinking of hiring a tax consultant but still have questions? Want to outsource your business finances to a team of expert accountants who can help your business grow? To find out more, book a free call with me here.

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