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How To Hire A Tax Consultant And Guide To Preparing And Filing Your Business Taxes. < Business Articles By Mast Business Directory


Nothing is as certain as taxation. You are bound to pay taxes on your income. There is no way of escaping it. The maximum you can do is hiring a consultant who has in depth knowledge of policies in taxation levied on individuals as well as corporates. Such kind of consultant for tax purposes is called a tax consultant and they usually hold Master of Law in Taxation degree. The tax consultant keeps himself up to date with all the new updates that are announced by the income tax department. This very same consultant advises you on how and where can you save money on taxation. He tries to explore the loopholes in the taxation rules and gives you an optimum solution as to where can you not pay taxes and claim your income tax returns. Every individual and business group derives huge benefits and saves millions of dollars by hiring a tax consultant. The tax consultant obviously is to be paid huge amounts of money, maybe even on a commission basis so as to avail his services. In the article to follow, we shall explore ways to hiring a tax consultant by looking at certain considerations that need to be fulfilled before the tax consultant kicks in and avails his services to a business.

What do tax consultant firms do?

Mostly, the businesses are not sure as to what steps should be taken for the incorporation of tax planning into their overall business strategy. They do not have in depth knowledge on how to maximize their profitability and reduce their tax liability by limiting exposure of their income only to a specific source or sources of income. Due to this lack of knowledge on tax planning, these companies opt out for availing services from a firm which deals in tax consulting. Many accounting firms tend to specialize in tax planning and they hire professionals or train the employees in this very field. The clients of these accounting firms which are usually giant corporations take advice on how to structure their businesses for joint ventures and conduct transactions such that they can avail to themselves the benefits of savings derived from lesser amount of taxation levied to them in whichever way this is possible. This is to be done by complying with the existing laws pertaining to taxation. Also, a monitoring system on such tax evasions gives rise to updates in the rule books of taxation each financial year. Due to this reason, the corporates have to avail services from tax consultation firms each financial year without having the same tax planning structure every year. The areas where the tax consultant can give updates to their clients are operations conducted in the multiple states, business succession planning, transactions, e-commerce, purchasing or selling of a property(real estate), taxpayer dispute resolution etc.

Firm size and Big Four consideration

The first and the foremost thing to do while choosing a tax consultant firm to avail benefits by saving on taxes is to have a look at its size. Size here necessarily means the strength of the employees. Fortune 500 companies mostly rely on the Big Four accounting firms of the world for tax savings purposes. The companies that are termed as the “Big Four” are Deloitte, KPMG, Price Water house Coopers (PWC) and KPMG. These accounting firms are MNCs with their presence in almost all parts of the world. The companies those are not listed in the Fortune 500 series tend to avail services from smaller accounting firms and continue their process towards savings on taxes. Do not choose a tax consultant in the Big Four companies if your turnover is not very high. Being a small company, you do not form a significant amount of business to any of the accounting companies listed in the Big Four and hence, they tend to keep you in the lower levels of their clientele priorities. This will make you get shuffled in the process and ultimately get lost in the process. More than stressing on the size of the firm and which companies form their client base, you need to stress on whether these accounting firm have the expertise, resources, infrastructure and the technical skills to evaluate your business as a whole and provide you solutions on your investment options and tax saving areas.

Non Big Four consultants

The best thing to do about hiring a tax consultation firm is to consult a business that is similar to your own about which tax consulting firms they usually avail services from and how has been their relationship over the last few years. A word of mouth and a set of recommendations often help in finding the right kind of companies whom you can give your business. A referral from the association provided that you belong to an industry association will also do you a great deed. Do not hesitate to ask the tax consulting firms about their clientele profiles. Do not hesitate in running background checks on the tax consulting firms for any bad impression and cheating/ fraud towards any of their clients. A tax consulting company which is well established itself in the market and is in business for a number of years might have gained a lot of experience. They might be able to tell you about their client profiles which are similar to the business that you conduct. There must be one of their clients in the past or present such that their size, structure, service needs and business and functional requirements are same as that of yours.

Background checks on the firms

If particular tax consultation firm is good but cannot do audits for you due to being heavily loaded because of work, then ask them if they know of a similar size tax consultation firms those are rated as good in the market by their various clients. Call the companies which have availed services from a particular tax consultation firm and ask them about their work. Research on as to how the tax consultation under your consideration has helped a particular business to save a significant amount of money through tax savings. Make it a point to check about the service the tax consultant provides the client with. Check whether it is just an ordinary service which involves only basic consulting on taxation or the tax consultant is actually proactive and calls the clients from time to time about the updates in the taxation laws and the advice thereupon.

Tax professionals’ credentials

Ask for the information about the credentials of the tax consulting firm and the professionals that are hired under it who will ultimately be a consultant to you and provide you with their valuable advice. The accountants in a good firm should be licensed and registered under an appropriate body which governs taxation rules. They should be certified with respect to certain professional qualifications. Even the academic qualifications must meet the stringent requirements. They should be graduates from leading universities of the world.

Visit the firm’s website

Do keep a track of the tax consulting firm’s actions and auditing issues by visiting their websites regularly. Also you can look out on the internet about any articles that have been published about the tax consulting firms or any of its employees.

Interview thoroughly

When the tax consulting firms approach you for their own business, do not hesitate to interview them thoroughly. Make sure you speak to the tax consultant who shall be handling your accounts for future. It is necessary that this particular consultant that we are talking about should be easy going. Not only should he know his business and handle your business effectively by providing the right kind of advice, but also he should be able to maintain a good relationship with you. It becomes very difficult in business to work with someone who is not in talking terms with you. If that happens in any case, it means that you are bound only by legal grounds and shall get apart from each other as soon as the final transaction in the business comes to an end. The person should be likeable by you and your colleagues who are going to interact with him directly. Sometimes, it is difficult to maintain a good relationship with a consultant as a whole because what the tax consultation firm does is; it revolves its professionals at your doors from time to time. Different people keep on visiting your company to give advice to you and you keep looking at new faces regularly.

Broadcast your expectations

Be clear and firm in your expectations that you have from the firm to who you have given your business consulting. Ask them to give you a rough idea as to how to save money from taxation. Clarify the fees that shall be charged to you and billing of its services. While comparing fees charged by various firms, make sure you are comparing the firms with the same caliber and client profile because new and not so well established firms tend to have cheaper fees to which you shouldn’t succumb. Thus, in the above article we have explored various ways in which you can conduct research and backgrounds checks on various firms and arrive at a decision to choose an appropriate firm that shall do wonders for your business in the future.

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