Every year, during tax season and throughout the rest of the year, I encounter many common misconceptions and misunderstandings about what a taxpayer’s and tax advisor’s ‘job’ is, what is expected, and what is required.
The relationship between the two (taxpayer/tax preparer) should be viewed as a professional partnership much like that with your doctor or lawyer. The information or data that you know and understand and can provide will enable the professional to do their job efficiently, which is an extension of what the tax payer (you) already knows.
Every day we make decisions that have a cause and effect on the various aspects of our lives. A majority of those decisions have a financial impact and are economic in nature. Many of the stats and information included in my blogs are taken from the text “Concepts in Federal Taxation” and what I want stress is that most economic transactions have an income tax effect and tax consequences ~ the income tax law influences personal decisions and enables a person to reduce other costs.
Although a competent tax advisor will know about tax planning techniques and current tax developments you will be more familiar than an advisor is with your financial affairs and objectives, but the two of you must work together to achieve your long term goals.
Ultimately, it is your money (responsibilities) and you should have a clue about how much tax you pay, where that money goes, and how to reduce certain costs. Save, invest, purchase, sell, VOTE…. if you and your tax preparer stay educated and informed, together you will make the most of your income and expenses.