A financial advisor can give you a lot of advice about how to manage your money, avoid large expenses and make sound financial decisions for you, your family, and your business – if you have one. In a lot of cases, however, you’ll find that you might need more specialized advice if you want to avoid certain pitfalls and problems. That’s true when it comes to preparing tax documents and dealing with audits, as not all financial advisors are able to give proper advice and relevant information to advise their clients about these things.
Your best choice is to hire a financial advisor that has a team of dedicated experts to inform and support them, including a seasoned CPA (certified public accountant). CPAs are different from regular accountants in that they have a certification that was earned through a combination of education, licensing steps and practical experience.
The main difference between a regular accountant (which is just about anyone with a little experience giving financial advice) and a CPA is that CPAs are somewhat like licensed and insured contractors with years of experience, while regular accountants are like calling your tech-savvy friend to help you with some Sunday DIY work.
Relating to taxes in particular, a financial advisor with a CPA can give you a lot of support when it comes to specific issues. For instance, they’ll help you to keep accurate and up-to-date records of all your financial transactions, as well as receipts, invoices, and any other documents related to your income and expenses. This will make it easier for you to prepare your tax return and ensure that you don’t miss any deductions or credits that you’re entitled to claim.
They also have the knowledge and expertise to assist you in taking advantage of tax-advantaged accounts. Consider using tax-advantaged accounts such as IRAs, 401(k)s, and HSAs to save for retirement or healthcare expenses. Contributions to these accounts can reduce your taxable income, and in some cases, the money you save grows tax-free.
Finally, they’ll make sure you can take advantage of deductions such as mortgage interest, property taxes, and charitable donations to reduce your taxable income. One tip is to consider making charitable donations or paying property taxes before the end of the year to take advantage of these deductions in the current tax year.
A financial advisor with a CPA is a powerful combination. Experienced financial and tax advisors Denver area professionals can get you out of a lot of unique and problematic situations. While a financial advisor can help you establish your budget, cap your expenses and make prudent choices when it comes to investing and allocating money for your retirement fund, an advisor who has the support of a CPA can also help you out when dealing with assets that are or aren’t taxable, preparing tax documents or making future financial decisions based on new tax laws that may impact your future goals and achievements.
CPAs on their own can also help you when you’re dealing with an audit, need a financial consultant who has experience with business decisions, or even when you are looking for a professional senior manager of finance at your own company. However, even just in the role of financial advisor, a CPA will typically assist with basic life decisions relating to money management, taxes, income, investments and retirement strategies. They’re definitely worth having around!