When Should you Talk to a Tax Lawyer vs a CPA?

CPAs and tax lawyers (tax attorneys) are both uniquely qualified and trained professionals that may advise you on your tax obligations and your financial decisions and planning. Which firm you pick will be determined by your combination of circumstances and the kind of assistance you want. Understanding the training and skills of these professionals and how they could be of the most significant use to you in your particular scenario will be made more accessible by this article.

Education and certification for CPAs

Non-certified public accountants are not required to undergo the same amount of training, education, and testing as certified public accountants, which is reflected in their salaries (CPA). Certified public accountants must complete 150 hours of undergraduate coursework, often 30 hours more than the requirements for most bachelor’s degrees in accounting. The completion of five years of college education, including at least 30 hours at the graduate level, or completing a master’s degree in accounting is occasionally required of CPA candidates.

Tax lawyers get training.

Before applying for the post of a tax attorney, candidates must first finish a four-year bachelor’s degree programme, which is often in mathematics, accounting, or business administration. After that, students must pass the Law School Admission Test to be admitted into a law school (LSAT).

 

The Law School Admissions Test (LSAT) examines talents in areas related to the legal profession, such as critical thinking, analytical reasoning, and reading comprehension. To get admitted to law school, even with a high LSAT score, candidates must often through a lengthy and arduous admissions process to be accepted.

 

If you pay close attention to the marketing for all of the free software and tax filing systems available, you may conclude that you do not need the services of a certified public accountant for all of your tax-related issues. However, there are certain situations in which having a second set of eyes is not just recommended, but necessary when it comes to tax preparation.

 

Not just as a certified public accountant, but also as a qualified tax attorney with extensive expertise. Tax accountants, contrary to what some tax experts have suggested, fill out tax forms and help with tax returns, but it is tax lawyers who set up the legal structures that have the most influence on your tax burden.

To evaluate whether it is preferable to use a legal business rather than an accounting firm, consider the following: Here are a few pointers:

You are the proprietor of a corporation

Even though we’ve discussed the fact that most company structures are far too complex for you or your accountant to figure out on your own in the past, it bears repeating: When it comes to tax legislation, a professional tax lawyer will be able to advise you on everything from company structures to business deductions, in addition to the tax liabilities of any employees you may have. If your firm has accepted venture money or merged during the previous year, you will also want the services of an experienced tax attorney.

 

Those who are self-employed or who own and manage their own small business will find the above to be especially true. As a freelancer or a business owner who has a large number of clients, you may run into legal complications in addition to the possible tax deductions associated with a home office, travel expenses, and work supplies, among other things.

You’ve gone through a lot of changes recently in your life

Yes, you may choose a checkbox to indicate that you have purchased real estate, been married, divorced, or moved to your place of work, among other things. These activities, on the other hand, may have a cascading effect on your financial condition that your tax software may fail to account for. What proportion of your 401(k) money did you have to use to put down as a down payment on your house?

 

You may have transferred your IRA to a new employer when you changed employment. Did you reorganise your money or assets as a consequence of a prenuptial or postnuptial agreement or another legal arrangement? Is it time for you to start putting together your estate plan? Alternatively, do you now get child support or spousal support payments after previously receiving neither? Tax season is approaching, and a tax attorney will be well-versed in dealing with all of these concerns when it comes time to file your taxes.

A representative from the Internal Revenue Service has contacted you

 

The federal government comes knocking on your door and you don’t want to be left to deal with them on your own, so you hire a professional to help you. What matters is that you have an attorney on your side when dealing with the IRS, whether you owe money to the agency, are the subject of an audit, or are being investigated for tax fraud. An attorney will be able to communicate with the IRS and differentiate between dishonest tax filing and an honest mistake if one is required.

Conclusion

It is recommended that you speak with an experienced tax attorney in your region before beginning your tax preparation since state tax requirements may change depending on where you live. Whether you want the assistance of a certified public accountant (CPA) or a tax attorney to help you with your unique situation, you must choose the professional who will work most effectively with you.

 

Choose a CPA who has worked with consumers in similar financial situations to yours, whether you are the beneficiary of a family trust or a limited liability business owner, for example. Examine the CPA’s demands to ensure that you understand what the CPA will want from you and that you feel comfortable discussing your personal or business finances with the CPA. In many cases, you’ll be working with a CPA for a lengthy period, so you’ll want to find someone you can trust and who you can communicate with effectively.