Tax Strategist vs. CPA: 3 Differences and 3 Points for Collaboration

Business owner, tax strategist, and cpa working together
Share this article:

In a complex financial world, high-net-worth individuals and families often grapple with intricate tax matters. With ever-changing laws and regulations, these situations grow increasingly challenging, leaving those not well-versed in tax law scrambling to stay compliant. Fortunately, enlisting the help of tax professionals is an effective way to sort through tax-related issues.

The term “tax professional” is a blanket term with various roles under it, such as tax strategist and CPA. Both services are equally essential to ensure you are tackling your taxes using a holistic approach.

Learn the difference between a tax strategist and a CPA and how the professions working hand-in-hand can help solve your tax issues effectively.

What is a Certified Public Accountant (CPA)?

A Certified Public Accountant is a designation given to accounting professionals who have met specific educational and experience requirements. The CPA’s role in accounting is multifaceted and encompasses a wide range of responsibilities: tax preparation and filing, tax compliance, and auditing.

What is a Tax Strategist?

A tax strategist is a highly specialized professional who develops strategic plans to minimize tax liabilities for individuals and businesses. Their primary objective is to help you legally reduce your tax burden while ensuring compliance with tax laws and regulations. 

Tax strategists possess in-depth knowledge of federal and state tax codes and stay updated on the latest changes in tax legislation. With these, they can formulate the right solutions to complex tax problems.

Tax Strategist vs. CPA: How Do They Differ?

These two professions are well-versed in tax-related matters. However, key differences make one more appropriate in certain situations than the other. This section tackles the differences between a tax strategist and a CPA.

1. Focus of expertise

On the one hand, the role of CPAs typically revolves around auditing and tax preparation due to their expertise in financial reporting. They ensure the accuracy and integrity of financial statements and conduct audits to assess a person or organization’s compliance with accounting principles and regulatory requirements.

On the other hand, tax strategists take a broader perspective regarding expertise. While they are proficient in tax planning and compliance, the scope of tax strategy goes beyond traditional accounting functions. It is not uncommon for tax strategists to give advice related to business structuring, operations, and investments.

2. Education and certification

The path to becoming a CPA or tax strategist is almost similar, with some nuances. 

For CPAs, they first need to earn a bachelor’s degree. Next is to pass the American Institute of Certified Public Accountants (AICPA) exam to secure the practicing license, which they must renew every one to two years.

Tax strategists do not have a set path. Many tax strategists are former or current CPAs, tax attorneys, financial advisors, or enrolled agents in the IRS. Unlike CPAs, they are not bestowed with a special license. However, the IRS does regulate the tax strategists’ duties and ethical standards.

3. Outlook

Due to their responsibility to record transaction history for tax filing purposes, CPAs tend to be reactive. On the contrary, tax strategists tend to be proactive since their primary goal is to continuously provide credible advice to reduce tax reliabilities.

How Can a Tax Strategist and a CPA Work Together?

CPAs and tax strategists have specialties regarding tax-related matters. However, there are specific financial issues wherein enlisting the help of both can be beneficial. 

1. Review tax returns for missed opportunities

After a CPA has prepared your tax return, a tax strategist can analyze it to identify any potential deductions, credits, or tax-saving opportunities. They can carefully examine your financial situation and goals to ensure all applicable tax strategies are employed to minimize tax liabilities and maximize after-tax income.

Moreover, if your tax experts determine you’re due for a tax refund, they can collaborate to advise you on what to do. With insights from a CPA, your tax strategist can formulate a plan for investing in a particular venture or paying off unsettled debts.

2. Resolve tax disputes

Tax disputes may happen when both parties interpret or apply tax laws and regulations differently. When these disputes or audits occur, the assistance of both a CPA and tax strategist becomes even more crucial.

A CPA can collate and audit the necessary documentation and information to support your position, while a tax strategist can use their expertise in state and local tax laws to defend your position. Moreover, they can use the same knowledge to advise you against making a decision that will land you in a dispute.

3. Create tax-efficient investing strategies

The tax strategist can assess your investment portfolio and goals, considering the tax implications of different opportunities. After the fact, tax strategists can collaborate with the CPA to ensure the investments align with your overall tax planning objectives and take advantage of available benefits or incentives.

Optimal Tax Management

Tax is a complicated obligation, which leaves many to dread it. Fortunately, you have experts in the form of CPAs and tax strategists to make this otherwise arduous process more manageable. On top of that, they can work together to ensure your finances are in order and you’re legally compliant, potentially saving you money long-term.

We hope this article provided credible insight regarding the differences between a tax strategist vs. a CPA and how these two experts’ collaboration could be beneficial. 

To ensure your finances are in good hands, consider working with a professional financial advisor like what Tencap offers. Apart from investment planning, estate planning, and other services, we also provide tax strategy services for our clients to gain insights into their investments. 

We are not competing with your CPA—Tencap believes that high-income earners need both tax strategy and tax compliance professionals to guard and grow their wealth for the future.

Schedule a consultation right now and discover everything Tencap Wealth Coaching offers!

Photo of Greg Black
Greg Black, CFP®, ChFC®
Wealth Advisor | + posts

Greg Black is the owner and founder of Tencap Wealth Coaching, an independent investment advisory firm founded on academic investing principles. As a Certified Financial Planner, Greg takes an educational approach to helping his clients be settled and responsible with their financial circumstances. Greg specializes in helping his clients create a proactive plan to minimize the exposure of market conditions while still harnessing the incredible power of global financial markets.

Greg specializes in "complexity" and is skilled at turning a complicated situation into an organized strategy for the families he serves. Greg, and each advisor of Tencap, is a stated fiduciary. You never have to wonder if your best interest is being served. Greg has been transforming the investor experience since 2012.

Share this article:
Table of Contents
Recent Posts

Disclosure

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results.

Opinions expressed herein are solely those of Tencap Wealth Coaching and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Tencap Wealth Coaching, an Investment Advisor in the State of Utah. Being registered as an investment adviser does not imply a certain level of skill or training.

  • Tencap Wealth Coaching is not affiliated with or endorsed by the Social Security Administration or any other government agency.
  • Insurance products and services may be offered through Tencap Wealth Coaching.

The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Utah or where otherwise legally permitted.

Images and photographs are included for the sole purpose of visually enhancing the website. None of them are photographs of current or former Clients. They should not be construed as an endorsement or testimonial from any of the persons in the photograph.

Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.

Links to Other Sites

The inclusion of any link is not an endorsement of any products or services by Tencap Wealth Coaching. All links have been provided only as a convenience. These include links to websites operated by other government agencies, nonprofit organizations and private businesses. When you use one of these links, you are no longer on this site and this Privacy Notice will not apply. When you link to another website, you are subject to the privacy of that new site. 

When you follow a link to one of these sites neither Tencap Wealth Coaching, nor any agency, officer, or employee of Tencap Wealth Coaching warrants the accuracy, reliability or timeliness of any information published by these external sites, nor endorses any content, viewpoints, products, or services linked from these systems, and cannot be held liable for any losses caused by reliance on the accuracy, reliability or timeliness of their information. Portions of such information may be incorrect or not current. Any person or entity that relies on any information obtained from these systems does so at her or his own risk.