How to Find a Tax Strategist in 2024
As an investor navigating today’s volatile markets, protecting your wealth against tax and economic headwinds is crucial. That’s why you need a tax strategist to help you build a tax-advantaged investment portfolio.
This article provides a practical guide for investors like you seeking expert guidance on how to find a tax strategist. We’ll walk through best practices for conducting due diligence, evaluating credentials and experience, and assessing fit. We’ll also share how our firm, Wellings Capital, leverages commercial real estate to deliver strong returns with tax advantages.
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What Is a Tax Strategist and Why Do You Need One in 2024?
Tax strategists are financial professionals who specialize in tax planning and compliance. They have an in-depth understanding of the complex tax code and stay up-to-date with frequent changes in tax laws. Unlike a typical CPA (Certified Public Accountant) who focuses solely on compliance and filing taxes, a tax strategist proactively plans and implements strategies to minimize tax liabilities. Some tax strategists are also CPAs.
Why You Need a Tax Strategist in 2024
The 2024 tax reforms can impact your tax burden. A tax strategist can help you navigate these changes and take advantage of any new opportunities to optimize your tax savings. They keep track of the latest updates, interpretations, and guidance on tax laws, so you have an expert on your side.
How a Tax Strategist Can Help You
A tax strategist offers both tax compliance and planning services. For compliance, they can prepare and file your tax returns to ensure accuracy and maximize your deductions and credits. For planning, they analyze your income, investments, business interests, and estate to develop tailored strategies that align with your financial goals.
Some of the ways a tax strategist can help include:
Identifying tax-advantaged investment opportunities like retirement plans, college savings plans, and health savings accounts
Structuring your estate and gifts in a tax-efficient manner
Reviewing your tax withholdings and making adjustments to avoid penalties
Advising you on the tax implications of life events like marriage, divorce, or job changes
Recommending entity structures for your business to optimize tax benefits
Identifying tax credits and incentives you may be eligible for
Utilizing a tax strategist allows you to focus on your financial priorities with confidence, knowing you have an expert managing one of the most complex areas: your taxes. For instance, my tax strategist introduced our firm to a Medical Expense Reimbursement Plan (MERP), which saved our staff a substantial amount of money on deductible medical expenses. Their guidance can lead to significant tax savings and help you make the most of new tax laws in 2024 and beyond. But how do you find the right tax strategist? Continue reading to learn more.
How to Find the Best Tax Strategist for Your Needs
To ensure the best result, you need a tax strategist with experience to back their claims and essential skills to navigate the tax terrain.
Here are some considerations:
Check credentials and experience
Understand their services
Compare fees
Discuss communication
1. Check credentials and experience
The most important step is verifying credentials and experience. I recommend starting by joining an investment group, either online or local, and asking for referrals. Once you have some names, check their credentials.
Search the IRS Directory of Federal Tax Return Preparers for certified public accountants (CPAs), enrolled agents (EAs), and tax attorneys in your area. Compare their credentials, years of experience, specializations, and client reviews. For complex tax situations, we suggest looking for a CPA or tax attorney with at least 5–10 years of experience.
2. Understand their services
Not all tax professionals offer the same services. Tax preparation professionals typically handle filing returns, while tax strategists focus on minimizing your tax liability through income, deduction, and credit planning. For investors, tax strategy services are invaluable to minimize tax liabilities. Ask candidates about the scope of their services to find one suited to your needs.
3. Compare fees
Fees vary widely depending on credentials, experience, and services.
CPAs and tax attorneys typically charge $200–$550 per hour. On average, you can expect to pay between $1,000–$2,500 for penalty abatement and $2,000–$3,500 for a simple IRS audit. Those who provide tax strategy services may charge flat fees or hourly rates.
Compare fees from multiple candidates to determine a fair price range based on your needs before signing an agreement.
4. Discuss communication
Effective communication is key to a good working relationship with your tax professional. Discuss their preferred communication channels and availability to answer questions before and during tax season. Look for someone willing to clearly explain what tax strategy is, not just give you a quick answer. Strong communicators can save you time and frustration in the long run.
With the right tax strategist on your side, you’ll feel confident that your returns are filed accurately and your tax bill is as low as legally possible. Taking the time to find a great match for your needs will be well worth the effort. One way to ensure this is to hire a professional with the right set of skills.
Questions for a Potential Tax Strategist and/or CPA
A great tax strategist/CPA can save you money, save you time, and help you focus on your real business or job.
As a key asset for your business, you need to treat them as such. Interview them like you would a new executive. Check their references. Read all the reviews you can find. Perform background checks.
Don’t be afraid to ask them hard questions. See below for a few examples.
If I started working with you and your firm, would I actually be working directly with you? If not, what is the background and experience of the person I would be working with?
What does your typical tax strategy consulting process look like?
Approximately how many of your clients have been audited by the IRS? What did you learn?
About what percentage of your clients heavily invest in real estate or are a business owner?
What are the typical tax strategies you recommend for someone with a W-2 job?
Tell me about a recent regulation change that impacts real estate taxes.
What’s your experience defending clients before the IRS?
What’s a big mistake you’ve made on someone’s tax return? How did you leave money on the table for yourself or a client and what did you do when you found out?
Would you consider your advice to be aggressive or conservative? Can you share some examples?
If I have real estate in multiple states, how do you determine which states I must file in and which ones I can avoid?
How much do you charge per state filing?
How do you educate your clients? And, conversely, how do you educate yourself?
Test them out. Note their response time to emails, texts, or calls. Even if they’re numbers-oriented and not particularly salesy, you should expect a high customer service standard.
5 Key Skills to Look for in a Tax Strategist
When evaluating candidates for a tax strategist role, look for the following key skills:
1. Advanced Tax Knowledge: An effective tax strategy pro must have an in-depth understanding of every tax law and regulation and stay apprised of recent changes to codes and rules.
2. Strong Research and Analysis Skills: It is crucial to research complex tax legislation and analyze its options and impacts. Your strategist should think critically about your unique situation to develop customized solutions.
3. Technological Proficiency: Mastery of tax software, platforms, and digital tools allows a tax strategist to work efficiently and ensure accuracy. They should leverage technology to simplify processes and access the latest resources.
4. Communication Skills: A tax strategist must be able to explain complex tax concepts and strategies clearly and understandably. They need to listen to your concerns and questions and then provide responsive answers and recommendations. Strong writing skills are also important for articulating tax plans and positions.
5. Negotiation Skills: The ability to negotiate the best outcome is invaluable when dealing with tax authorities. An adept tax strategist can make a persuasive case to achieve optimal tax deductions for their clients. They should aim to resolve issues cooperatively while protecting your interests.
6. With tax policies in flux and markets facing uncertainty, partnering with a tax strategy consultant who demonstrates these key skills provides reassurance. Their expertise and guidance can help you make the most of investment opportunities in a tax-efficient manner. Conduct tax strategy pro reviews to assess which candidates have the optimal combination of knowledge, abilities, and experience to suit your needs. With the right tax strategist on your team, you’ll have confidence your financial decisions are backed by sound tax planning.
At Wellings Capital, we believe an effective investment strategy goes beyond lowering taxes. It involves investing in tax-efficient assets that are equally recession-proof. Continue reading to learn more about how you may be able to lower your tax bills through proper investment.
4 Tax Strategies Beyond Just Lowering Your Tax Bill
Focusing on tax-efficient asset classes may allow you to save valuable time and consultation fees while seeking to maximize your returns.
Here are some investment strategies that have historically withstood recessions while providing tax advantages:
Invest in commercial real estate
Commercial real estate is an asset class that typically performs well during economic downturns and recessions, although these are no guarantees. The stable, long-term leases of office and industrial properties may provide steady cash flow and income, even when other investments struggle. Investing in commercial real estate may also provide significant tax advantages, such as depreciation deductions, interest expense deductions, and deferred capital gains.
Work with a private equity firm
To invest in commercial real estate, you may consider working with a private equity firm that specializes in real estate. Firms like Wellings Capital generally have the expertise to identify high-quality, income-producing properties and structure investments to maximize tax benefits for investors. Such organizations may take care of property management, leasing, accounting, and reporting, giving the investor the potential to earn attractive returns with less hassle. Get started today to evaluate if investing with a private equity firm is right for you.
Consider a 1031 exchange
A 1031 exchange, also known as a like-kind exchange, allows you to sell an investment property and defer paying capital gains taxes by reinvesting the proceeds in a new property within 180 days. This tax-advantaged reinvestment strategy lets your money work harder for you over the long run, but you need to carefully evaluate the 1031 asset and the sponsor of the program. Look for an operator with experience doing these transactions.
Explore investments in publicly traded REITs
Real estate investment trusts or REITs provide an easier way to invest in real estate. REITs own and operate commercial properties and pass-through income to investors. REITs are publicly traded, so you can buy and sell shares through a broker, giving you the potential for increased liquidity.
Some REITs also qualify for special tax treatment. Mortgage REITs that invest in real estate mortgages and loans, for example, typically distribute tax-advantaged dividend income, but the investor should carefully evaluate the structure of the underlying mortgages.
Using advanced business tax strategy, working with experienced professionals, and selecting investment vehicles tailored to your needs can help you make the most of your money while minimizing your tax liabilities. Keep your eyes open for opportunities beyond just reducing your annual tax bill. With the right approach, you can build wealth in the long run in a tax-efficient way.
Get in touch with us at Wellings Capital to learn more.
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Frequently Asked Questions
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The profitability of commercial properties varies based on market conditions, location, and management. All commercial real estate property types have been profitable at one point or another, depending on many factors, such as acquisition price. We like multifamily properties, self-storage facilities, mobile home parks, RV parks, and a few other asset types because they have historically been profitable through past recessions.
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Commercial real estate offers steady cash flow, potential tax benefits, and tangible asset value, providing a hedge against inflation. It's less volatile than stocks but requires significant capital and management. Stocks, on the other hand, offer liquidity, ease of diversification, and potential for high returns but come with higher volatility and market risk.
While commercial real estate’s illiquidity can offer certain benefits, the choice depends on your investment goals, risk tolerance, and time horizon. Combining both investment assets can balance risk and return in a diversified portfolio.
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Investors make money in commercial real estate through:
Rental Income: Regular cash flow from leasing space to tenants.
Property Appreciation: Increased property value over time due to market demand, improvements, and favorable economic conditions.
Tax Benefits: Deductions like depreciation, mortgage interest, and operating expenses reduce taxable income.
Value-Add Strategies: Enhancing property features or management to increase rental income and property value.
Leverage: Using borrowed capital to increase potential returns on investment.
These strategies provide multiple income streams and growth opportunities.
Conclusion
You now have a clear roadmap on how to find a tax strategist to protect and help grow your wealth in 2024 and beyond. It’s crucial to partner with a tax advisor who understands both sides of the investing equation — working to minimize taxes while maximizing returns. Wellings Capital has a proven track record guiding clients to smart commercial real estate investments that provide stable cash flow and tax benefits, but all investors may not be willing to assume the risks associated with investing through a private equity firm.
If you have any questions, please contact us or use this link to schedule a call with us.
DISCLAIMER: This article is for educational purposes only and is not to be relied upon as the basis for entering into any transaction or advisory relationship or making any investment decision. Wellings Capital Management, LLC is an Investment Adviser registered with the SEC. All investments pose risk, including the possible loss of all principal invested. Past performance is no guarantee of future results. There is no guarantee that any projected results will be achieved. Investors should consider the investment objectives, risks, charges, and expenses of any Welling Capital investment vehicle before investing. For a Private Placement Memorandum (“PPM”) with this and other information, please call 800-844-2188 or email invest@wellingscapital.com. Please read the PPM carefully before investing.
The information contained in this article is for information purposes, does not constitute a recommendation, and should not be regarded as an offer to sell or a solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be in violation of any local laws. All investing involves the risk of loss, including a loss of principal. We do not provide tax, accounting, or legal advice, and all investors are advised to consult with their tax, accounting, or legal advisers before investing. Information and any opinions contained in this article have been obtained from sources that we consider reliable, but we do not represent that such information and opinions are accurate or complete and thus should not be relied upon as such.