By the time you read this, you will have but a short time left before having to file your 2013 Federal income tax return. While it’s likely too late to change what you’ll pay this time around, start looking to the future now and put a strategy in place to reduce your tax bite in 2014 and beyond.
The words “tax planning” have become associated with the wealthy, right? Wrong! If you pay taxes, you need tax planning. If you only visit your tax adviser in April to get your taxes prepared, what can he really do for you? Once the tax year has closed, you can’t spend or shuffle money to gain tax advantages. Tax preparation is the final step in a quality tax plan; tax planning can help you reduce the amount you pay.
You should have both a short-term (12 months) and a long-term (three to five years) plan developed by a professional tax planner.
There’s a big difference between a tax preparer and a tax adviser or expert. A tax preparer receives payment for professionally preparing income tax returns. Anyone can become a tax preparer by taking a course and passing a test. This type of tax preparer is not qualified to interpret the tax code. There are three types of professional tax advisers: CPAs, enrolled agents and tax attorneys. As an owner of a trucking company, it’s very important for you to locate an expert in trucking business tax issues and regulations.
When seeking a tax expert, look for the following:
- Experience. How long has he worked with people in logistics and transportation? What’s his background in accounting and taxes?
- Full-time. Does he have a 12-month practice? You need advice all year from the person who’s going to prepare your tax returns.
- Audit experience. How often does he represent a client before the IRS, and does he back up the returns he’s prepared? When was the last audit in which he represented a client?
- Creativity. Does he understand the tax code so he can push the envelope but not create a tax penalty risk for his clients?
- Aggressiveness. Is he willing to argue his interpretations of the tax code before an auditor?
- Continuing education. Does he take several hours of tax code classes annually to be sure he understands all the changes made that year?
- Stability. Where is he working from? How many clients does he have? How many long-term clients are trucking companies?
It’s not just the letters that follow a tax adviser’s name that qualify him/her to be your tax expert; it’s knowledge of the trucking industry and how it relates to the tax code. You can have the most qualified trucking tax expert in the country, but unless you provide that expert with complete expense and income records, no talent, knowledge and skill can produce the results you need. This is where planning ahead will really pay off.
Contact Tim Brady at 731-749-8567 or at www.timothybrady.com
