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Explain Roles of Financial Planner vs Tax Planner vs Tax Attorney

• Hello, I'm trying to understand the specific roles and interactions between a Bookkeeper, Accountant, Tax planner, Financial planner/advisor, and Tax attorney. For example, what are common relationships and tasks between these entities from the point of view of a small business owner? E.g., might I hire an accountant, who doubles as a bookkeeper, or would the accountant typically choose/hire his own bookkeeper? Does the accountant strategize about minimizing tax liability, or is that the job of a financial advisor... or perhaps a tax attorney? I can smell an "it depends" answer a mile away :) so I'll clarify that I am looking for the *most common* outlook for a small/mid-sized business who would not require any of these resources full-time, but instead use them on an hourly/retainer basis. I'd prefer (but not require) an answer from someone with personal experience in this area, because I may have a few followup questions. Thank you!

• Answer:

  Hello and thank you for your question. Bookkeeper Your 'books' reside on your premises. Since a bookkeeper keeps the books, he or she is usually an employee of yours, possibly on a part-time basis. If your operation is so small that you can't afford to hire a bookkeeper, then possibly your accountant has a staff person who can come by every week or two to update the books from your receipts, or you can make entries as you go on a product like QuickBooks. http://quickbooks.intuit.com/ Accountant Most accountants are C.P.A.'s, which certifies them to render financial statements that owners, banks and the public can rely on. Typically you would submit your books (see above) to your accountant, either monthly, quarterly or once a year depending on your scale of business. Your accountant would then produce monthly, quarterly or annual financial statements (balance sheet and profit/loss statement) and would help with your estimated tax payments and annual tax return preparation. Tax planner Not really a formal designation, but many accountants will give useful tax advice based on what they see. For example they might recommend that you form an LLC or incorporate as a sub-S corporation, establish a pension plan, etc., and they should be sensitive to issues such as whether your payroll withholding is being handled properly, whether you're keeping adequate records, whether you have suitable medical and life insurance and the like. Financial planner/advisor Most financial planners have a product to sell, namely brokerage and investment services and/or life insurance and are happy to advise you along these lines for free. Because of the obvious potential for abuse, there are also financial planners who are fee-based, i.e. they charge by the hour and do not accept commissions on your securities and life insurance purchases. http://invest-faq.com/articles/fplan-choose-planner.html Tax attorney These provide a variety of services, depending on your situation. If you're in a civil or criminal audit, or if you owe back taxes, they can deal with the IRS on your behalf, or they can work in the background in support of your accountant (often the IRS is more comfortable if the accountant who prepared the return defends it rather than an outside attorney). They're also a good choice to draft your will and living trust, since they're sensitive to the tax attributes of estate plans. If you're wealthy (at least a couple of million dollars) they'll have more sophisticated tax proposals, including charitable planning, pension proposals that your accountant may not have considered, sub-S and LLC plans, again using your accountant's work as a starting point, etc. Search terms used: Quickenbooks fee-based financial planner Please excuse the sparse number of Google research cites in the above note. This is an area that I'm familiar with and I was able to write this ex tempore. If you would like citations to particular concerns or issues, please Request Clarification and I'll be happy to provide them. I would appreciate it if you would hold off on rating my answer until I have a chance to respond. Sincerely, Google Answers Researcher Richard-ga