The year I discovered the difference between a Tax Preparer and a Tax Advisor was back in 2002 when Brandy and I were both teaching.

Up until that point, I had always prepared my own taxes.  However, in 2001 Brandy and I had just bought our first home, and we wanted to make sure that we were doing things correctly, so we decided to go to someone to prepare our returns.  Being the teacher that I was, I worked on our return the night before in order to compare how well I did when we met with the preparer the next day.  I guess I was hoping he would give me a good grade!

The next day when we had our one and only appointment, I was shocked to discover that he came up with a smaller refund than I did on my own the night before.  He had me getting a smaller refund by a couple hundred dollars!  Add in the fact that I had to pay for his services, and I was just a little frustrated.   So, again like a good teacher, I had to gracefully and tactfully show him his mistakes and together we got the same refund I came up with the night before.  Unfortunately, I was still out the money I had to pay him.

To say that I was frustrated would be an understatement.  Brandy and I felt like we were being rushed throughout the appointment, the preparer missed many deductions that I was able to find on my own, and I was going to pay him to get a lesser refund than I got on my own.

To further add to my frustration, when I asked him about what we could do to lower our taxes for the future, he pretty much said we were doing all we could.  I knew this couldn’t be true!

This is when I began to realize that there is a major difference between a tax preparer and a Tax Advisor.  This was one of several events that started my journey of getting the information, knowledge, and training I needed to minimize my income taxes.  Little did I know at the time this experience would also one day help my future clients.

It has become somewhat of a mission of mine to find all the deductions and credits that I can for my clients.

If you have ever felt the same way as Brandy and I did back in 2002, please feel free to email me or comment below and share your story.  I guarantee you are not alone!

If you’d like to see if you are getting all the deductions to which you are entitled, and would like to lower your income tax liability, please feel free to contact me anytime.

You may have noticed that I often refer to myself as a Tax Advisor rather than a Tax Preparer.  Although I am a Registered Tax Preparer, I believe there is a major difference between those who refer to themselves as Tax Preparers vs. Tax Advisors.  I have also recently come to realize that I might be confusing people.  Just the other day when I posted about year end tax saving tips, I received an email with the question, “Is a tax advisor the same thing as a tax preparer?”   

I figure if one person asked that question, there are probably many more that I’ve confused as well.

Here are the differences!

Short answer – Both Tax Preparers and Tax Advisors are “tax preparers” and can prepare tax returns, but a Tax Advisor provides many more services for their clients.

Long answer – If the only advice you are getting about reducing your taxes, or increasing your refund, is to change your withholdings and to contribute more to your retirement account(s), than you are most likely dealing with a tax preparer.  If on the other hand, the person who prepares your taxes takes the time to meet with you, goes over your taxes, and educates you on ways to reduce your taxes now and in the future, then you are most likely dealing with a Tax Advisor.
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A Tax Preparer is best for people who want to have their taxes done as quickly as possible.  A Tax Advisor is best for people who want to have their taxes prepared as efficiently as possible – while paying the least amount in taxes.

If you’d like to read more about a frustrating experience I had with a Tax Preparer when I was a teacher, click here.  Not being educated almost cost me a couple hundred dollars that year!
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Here’s my breakdown on differences between Tax Preparers and Tax Advisors:

Tax Preparer

            Prepares Tax Returns, usually in one quick appointment
Usually only available between Jan – April
Usually very limited advice on how to reduce income tax liability

Tax Advisor

            Prepares Tax Returns, usually meets twice with clients to insure lowest tax liability.
Available all year
Provides personalized strategies to help reduce income taxes for years to come
Keeps in contact with his/her clients throughout the year
Provides personalized strategies to help maximize paycheck
Provides tax advice on issues like home ownership, retirement accounts, etc…
Provides financial advice
Considers tax implications now and in the future
Understands the whole “death and taxes” analogy more than any one person should
Is part of an Organization that promotes ethics 
(Here’s my Professional Profile)
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I encourage everyone to educate themselves and find the right tax advisor for them.  It’s almost always best to find someone who specializes either in your career field or business.  Above all else, make sure you trust the person!

Do you have any questions?  Would you like me to expand more on the differences?  Feel free to comment below or contact me anytime.

Please keep in mind that all the information I post on this site is for general purposes only.  I understand that every person’s situation is unique and should be treated as such.  If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

Attention Teachers!  In a future post I’m going to also discuss the differences between 403(b)/TSA Salespeople and Financial Advisors.  If you’d like to make sure you receive that post and any other future posts from me, please subscribe to my email list.

I know, I know, you don’t want to hear about taxes in December.  But just like there are many ways to save money on our purchases right now, there are many ways that we can save on our taxes right now too.

Most, but not all, of the tips listed below are for those who own a home and/or itemize their deductions.  If you don’t know whether or not you are eligible for these deductions please leave a comment below or contact me anytime.

Before I begin, let me quickly say that these items are the ones that I have noticed get overlooked most often.  Each year I prepare over 200 tax returns, and just like a teacher who has to grade well over 200 papers throughout the year – I remember this all too well during my 5 years of teaching junior high – we all start to notice common mistakes that are overlooked repeatedly.

So here some things that you still have time to do before the end of the year to save money on your taxes.

Classroom/Office Party – If you are having a party in your class/office, make sure to save those receipts.

Unreimbursed School/Business Expenses – Purchases that you don’t get reimbursed for can be written off as long as you use them more than 50% for school/work.

School/Work Shirts/Sweatshirts – Many people buy shirts with their school logo or work logo on them.  Did you know you can write these purchases off?

Charity/Church Cash Donations – This also includes donations through check and credit cards.  Gift purchases used for “Toys for Tots” or some other charitable function can also be included, just make sure you save your receipts.

Charity Non-Cash Donations – If you’re like me and my family, you may have already started de-cluttering your home and getting rid of some unused items.  Donate these items to either Goodwill or some other non-profit that allows for such donations – don’t throw them away!  Take a picture of the items you’re donating, and use this sheet provided by Goodwill® to help calculate the cost.  This could save you a ton of money in taxes!  Believe me, it’s worth it.

College Tuition – If you, your spouse, or child/dependent are going to college next semester, you may want to pay the tuition this year.

Energy Saving Home Improvements – The tax credit for the cost of energy-saving home improvements is 30 percent for 2010, up to a combined maximum of $1,500 in both 2009 and 2010.  It applies to qualified insulation, windows, outside doors, biomass fuel stoves and high-efficiency furnaces, water heaters and central air conditioners.

Have a Baby – Just Kidding!  I just wanted to see if you’re still reading!  If you do start though, you may get a credit/deduction next year!

Obviously, there are more things that can be done before the end of the year, and this is just a short list.  If you do have any questions, or would like clarification on something I talked about above, or something I didn’t mention, please feel free to leave a comment below, or contact me anytime.