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What is the major difference between tax preparation and tax planning? And how to hire the best tax consultant?

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  • 9 months ago

    Preparation refers to filling out the paperwork.

    Planning refers to making decisions with the effect on taxes taken into consideration. It is more about changing how much will be due, as opposed to finding out how much is due.

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  • Judy
    Lv 7
    9 months ago

    Tax preparation focusses on what has been done. Tax planning focusses on what to do in the future.

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  • 9 months ago

    Tax preparation is taking the numbers and putting them on the tax return. Tax planning is taking actions before return preparation that will give you a better result.

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  • 9 months ago

    Tax prep is the job of preparing ones taxes to be filed. Planning is totally different and is means to save as possible from paying taxes on ones income.

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  • 9 months ago

    The Tax Preparation is the final filling out of the IRS forms, transferring data line by line, form by form.

    Tax Planning is the year long (or more) sorting of data in a manner designed to cause the Least liability for paying IRS taxes.

    Examining the applicable tax code to find maximum possible deductions and locating to exploit loop holes in tax law.

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  • 9 months ago

    Tax Preparation - The actual completion of the tax return based income/expense for the past year.

    Tax Planning - Planning for taxes in the future based on expected outcomes.

    You probably don't need "the best". You just need someone who is competent.

    Look for people in your area that do taxes and meet with them.

    Actually, any preparer who tells you that they know some secrets or special things that others don't know and that will have you paying less in taxes should be avoided.

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  • A.J.
    Lv 7
    9 months ago

    Tax preparation is taking records and turning it into a tax filing. Tax planning is taking financial actions to reduce future taxes such as creating tax-free or tax deferred accounts and estate planning. You can evaluate based on reviews and references offered. Credentials are also important. What is their training?

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