A tax advisor is an individual or a business that helps you file and pay the right amount of taxes. They can also help you with tax deductions.
Tax advisors have a lot of knowledge about taxes and finance. They can be accountants, tax attorneys, auditors, or financial advisors, and can either work for an agency or be self-employed.
What does a tax advisor do?
A tax advisor can help your business with some or all of the following:
- File taxes, for example submitting the annual report at the end of the fiscal year
- Pay taxes, they can pay taxes on your behalf
- Ensure you claim all the tax deductions you’re entitled to
- Helping you pay less tax within the legal framework
A tax advisor can also be called a tax consultant. Their rates will vary from country to country, and also depends on how much assistance you require.
Some businesses hire a tax advisor once a year—usually at the end of the fiscal year, when they have to do their financial accounting—while others retain tax advisors throughout the year. It depends on your needs, and on the size of your business.
What are tax deductions?
As a business owner, you might have a lot of expenses, for example purchasing raw materials, renting office space, buying equipment, paying employee salaries and so on.
You can subtract all these expenses from your income. This will lower your overall tax bill. This is because you shouldn’t have to pay tax in income that you’ve spent to run your business.
Common tax deductions include:
- Costs related to office space, whether you rent an office or you have a home office
- Equipment and machines that you need to produce and sell goods and services
- Costs related to vehicles that you use for work, or transportation costs