No, Tax Preparation is just that: preparing the tax returns. It is also sometimes referred to as Compliance Work. Making sure the return is prepared in accordance with the tax law and it complies with tax rules.

No, Tax Planning requires a systematic approach to do a proper comprehensive Tax Plan. It requires two things one specialized software and two, proper training.

With so many “experts” claiming themselves as Tax Planner it is difficult to decipher. Look for certification which identifies the “expert” as having Tax Planning training. Certification like Certified Tax Coach (CTC) Certification is a good indication that the expert has proper training to perform a comprehensive tax planning.

Each tax return is different from other person as well it is different from one year to the next for the same person. Tax law changes so technique used one year may not be applicable in subsequent year even for the same person. But a trained Tax Planner should analyze your tax situation with an eye to use more than one techniques to reduce the tax. Techniques like Income Shifting, Recharacterization of Income, Recharacterization of Expenses, Income Deferral, Expense acceleration, Proper Entity Selection, Claiming available credits, using resources to utilize deductible expenses rather than paying taxes etc. are some of the techniques used by the Tax Planners.

There are so may so called “experts” preparing tax returns. Here are some of the certifications and their meaning.

CPA(Certified Public Accountant)
Certified Public Accountant is the title of qualified accountants in numerous countries in the English-speaking world. It is generally equivalent to the title of chartered accountant in other English-speaking countries. In the United States, the CPA is a license to provide accounting and tax  services to the public.

CTEC(Certified Tax Education Council)
California Tax Education Council provides Tax Education. The person who finished the required training and examination by the council received the CTEC Tax Preparation certification.

EA(Enrolled Agent)
Enrolled Agent is a tax advisor, who is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. Enrolled Agents represent taxpayers before the Internal Revenue Service for tax issues that include audits, collections and appeals.

CTC(Certified Tax Coach)
Certified Tax Coach examines your tax returns and finds ways to reduce the taxes by using various tax saving stretegies.

Not at all.

The fact is NOT hiring a CTC is more expensive.

In most cases the trained Tax Planner will save you more in Taxes than his/her fees!!

Absolutely the reason.

There is so much information available totally FREE of any charges. These FREE, 0$, information are just worth that 0$.

Sometimes they are outdated and expired and it can cost you tons of money in audit, penalty, extra tax not to mention stress.

In simplest terms, tax planning is using the tax code to take advantage of every possible credit, deduction, exemption, exclusions, and write-offs allowable by law.

Legitimate tax planning does NOT include

1. failing to report taxable income,
2. misrepresenting facts,
3. “hiding” funds in an offshore jurisdiction, or
4. failing to pay taxes based upon the “unconstitutionality” of the tax law.

The IRS has a web site (www.irs.gov) that alerts US taxpayers of some of the latest “tax scams.”

The tax code describes certain types of transactions or entities that have been given favorable tax treatment. Any one of these tax-favored transactions or entities is generally referred to as a “Tax Strategy.” To put it another way, tax planning is analyzing the tax code to determine which strategies are or can be made applicable to your circumstances.

Moreover, tax planning should include your gaining an understanding of the advantages and limitations of the strategy so that you are not putting into motion a strategy that will hinder you from reaching your other financial goals down the road.  An important point to remember is that no single strategy will perfectly meet all your needs. Congress has designed each strategy for a specific and narrow use. As such, many individuals use a combination of strategies in their overall plan, thus allowing the individual to benefit from the favorable tax treatment of the various strategies while reducing the amount of overall limitations.