Reviewed by Sep 30, 2020| Updated on
A tax advisor is an individual who is a financial expert holding specialized tax accounting, tax law knowledge, and know-how. In complicated financial cases, the services of a tax advisor are typically retained to reduce the tax payable while staying compliant with the law. Tax consultants may include tax attorneys, Certified Public Accounts (CPAs), licensed agents, and some financial consultants. A tax advisor is also called a tax consultant.
A tax advisor can work either for an agency or can be self-employed. In both ways of employment, they are given the task to find out effective ways of legally bringing down the tax liabilities for clients, estimating taxes on different investment portfolios, determining the right relevant deductions and credits, etc. They can also write tax returns for their customers and file them. A taxpayer who has faced a major life event—such as the death of a spouse, marriage, divorce, child birth or adoption, the purchase of a new home, job loss, inheritance, and more—would be prudent in seeking a tax advisor's services.
A tax paying entity, such as a person, company, business, trust, etc., with a complex financial circumstance (example: complex investments and deductions) that seek a tax advisor's expertise to help minimize the amount of taxes payable to the taxing authorities.
The advice and services rendered by a tax advisor can vary depending on the situation of the taxpayer. An individual who is planning for retirement will receive a different advice as compared to an entrepreneur who is looking to set up a shop. Even a real estate investor is likely to have a different tax requirement from a commodities trader.
Deals between a tax advisor and a company seeking to combine with or acquire another business may differ from its professional relationship with an executor of the estate seeking to minimize taxes on the land.