What is the difference between a Tax Strategist or a CPA? We hear
that question all the time. I’m a CPA trained as a Tax Strategist and
I’ve been doing that for over 15 years now.
First, let’s look at the many different faces of a CPA. A CPA could
specialize in financial reporting, in SEC work, in auditing, in
management or cost accounting or tax. So, just knowing someone is a
CPA, doesn’t really tell you whether they are skilled enough to help
you with a specific tax challenge.
Your choices start to focus when you make the decision to find an
expert to work with you regarding your taxes. An average tax CPA is
trained on how to complete tax forms. The work is done after the fact
and there is no tax planning available (because the year is always long
gone.) At this point, a good tax CPA (a step above the average) will
spot places that you can change your tax plan so that you don’t repeat
the same tax mistakes. There is an assumption that your income and
expenses will be similar, though.
When the next year’s tax return is done, a good tax CPA will be able
to further refine the strategy. In general, it takes about 3 years to
get a good tax strategy set up for an existing business this way. In
the case of a new business, it takes 3 years of stabilized income and
expenses to effectively plan a strategy.
Now contrast that with a Tax Strategist. A Tax Strategist is a CPA
who has studied how to predict tax consequences from business and
investment decisions. It’s part art, along with the science of
business. The primary difference between a good CPA and a Tax
Strategist is time. A CPA/Tax Strategist can lay out a course of tax
loopholes that steer you clear of tax situations, legally. A good tax
CPA catches you after you’ve run into the problems and then helps you
get out of them.
Let’s look at a quick example of what the cost of waiting might be.
Let’s say a Tax Strategy appointment with me found you the average
tax savings of $14,500. If you instead had a really good tax CPA,
chances are he would find the same the savings after the average time
of 3 years.
You’ve lost 3 years times $14,500…or $43,500. Plus, of course,
you’ve lost the opportunity to grow that money during those three